"Rule Breaker Investing" Stock Pick Review: The Big One

In this landmark episode of Rule Breaker Investing, Motley Fool co-founder David Gardner reviews and shares perspectives and learnings from the entire collection of 30 five-stock samplers picked from 2015 to 2021, and reviewed into 2024.

Using his special 10 1/2 chapter format, David reflects on the themes, results, and lessons from six years of stock picking. Discover the highs and lows, the glory and the pain, and the enduring principles of Rule Breaker investing.

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.

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This video was recorded on July 10, 2024.

David Gardner: Thirty separate times, about every 10 weeks on this podcast over six years. I picked five stocks. I chose a theme that made sense to me at the time, sometimes sublime, sometimes silly. Then I thought to myself, what are the five best recommendations that I can come up with for stocks that fit that theme? Aiming, of course, always to beat the market, the S&P 500. Otherwise, hey, why are we bothering? Then one year later, we reviewed the picks, and then another year passed. The two year review. Yes, two years later, we never forget. We hope you wouldn't also. We scored everything transparently and accountably, because we're Fools. You should expect that of us. Then the three year review, which would always be the most telling. First, because, of course, three years had passed, since I'd picked those five stocks, with the increasing passage of time, we really can be smarter about what has happened and why and what we can learn. That's the smarter part, but if I'd done my job well, then we'd also be happier and richer too. That three year review was the most telling because most of the time, we ended the game right there. We're going to keep holding those stocks in real life, mind you. You should, too, if you own them. But had I kept reviewing all 30 of my samplers in Years 4 and 5 and 6, and so on, we wouldn't have had time to do much else on this podcast. Thirty separate times, I picked five stocks, what I've also called my five stock samplers, and with this episode, we're going to review and learn from the whole shebang. The whole glorious experiment, the glory, and the pain. It's our Reviewapalooza Ultima. In 10.5 Chapters. Only on this week's Rule Breaker Investing.

Welcome back to Rule Breaker Investing in this special episode. In fact, I think it's special, if ever I call it 10.5 chapters. This is the third time in our nine year history, I've rocked my 10.5 chapter format. The first was as COVID hit. You can go back and listen to it. It was March 11th, 2020 for this podcast Thoughts On Our World in 10.5 chapters. The second time was when I retired from stock picking at The Motley Fool. That was May 12th, 2021, A Road Less Traveled, right here on this podcast, In 10.5 chapters. This week, it's Reviewapalooza Ultima in 10.5 chapters. As we look back over six years, what we can learn from the five stock samplers that were picked 30 times over Rule Breaker Investing. I'm excited to share these learnings and the fun with you now. I won't review the old story. It's actually told in Thoughts On Our World in 10.5 Chapters back in March of 2020. But a keys back to British novelist Julian Barnes. I see he is 78 years of age these days. Julian Barnes was right there in the first week we launched The Motley Fool newsletter as just a paper newsletter for our friends and family. We decided, can we get somebody famous to comment in the very first edition of The Motley Fool newsletter? Sure enough, Mr. Barnes graciously did it again, I tell that story a few years ago, but he wrote a novel called A History of the World in 10.5 Chapters. We were fans. That's why I continue to use 10.5 Chapters years and years later. I say without further ado, let's get started. Chapter 1. Chapter 1 is entitled Samplers, because that's what we call them from the very first one. The very first one, by the way, was five stocks for the next five years. The very first one was September 2nd, 2015, five stocks for the next five years. But from the very beginning, the intent was always, just to give you a sampling, five stocks. Of course, anybody building a portfolio, especially a Foolish portfolio. We've always felt like you should start with 25 stocks, not five stocks. But hey, five stocks here, five stocks there. Pretty soon, you can get to 25. There's no requirement anybody do that right away. We do think, by the way, anybody starting investing today should have at least 15 stocks in your starter portfolio. The beauty of it is commissions round to zero these days, and you can buy fractional shares. Just about any of us can start with a low amount of money and invest in 15 or more companies. Anyway, samplers, like going to whole foods, and there's the little bit of cheese that they put out front. You could sample the cheese. That's what my five stock samplers have been for Motley Fool Services. Behind my samplers, we have ample services, Motley Fool Stock Advisor around now for more than 20 years, hundreds of stocks under coverage. Motley Fool Rule Breakers, many other Motley Fool services. I know I'm speaking to a lot of members right now. You already are familiar with that. These samplers were just little bits pulled from different services. Most specifically from Stock Advisor and Rule Breakers and a service I managed for many years called Motley Fool Supernova. That's where all these stocks originated from.

One of the fun things about my samplers when I look back at them are some of the low cost bases that we enjoy. I'll be talking about those in a few chapters coming up. But it's worth pointing out, especially for new listeners that this podcast started in 2015. We started Motley Fool Stock Advisor in 2002. Many of the stocks that appear here in the samplers that I was picking in 2015 or '19 or 2021 have much lower cost basis in our subscription services themselves. For example, Mercado Libre was in that very first five stocks for the next five years sampler. The cost basis for Mercado Libre back then, September 2015, was 109.94, about $110 a share. But Rule Breaker members know that I picked Mercado Libre in 2009. Our cost basis for Motley Fool Rule Breakers is $14, not $110. For a lot of these, I was picking them up midstream, again, samplers, but for our members, they've enjoyed much lower prices and much longer holds in just about all of these companies. The winners and also the losers. We'll be talking about that in a sec as well. It's worth pointing out that the first two habits of the Rule Breaker Investor, Habit number 1 is rule number 1, let your winners run high. The second habit of the Rule Breaker Investor is to add up, don't double down.

When you think about those two habits taken together, which are all about the power of holding, you can especially appreciate then the benefits of having held these stocks for a long period of time. Later in this week's show, I'll be presenting you the numbers had you kept holding these samplers. I'm saving that one to the end, but the act of sharing with you these samplers midstream, I was in effect, adding to winners. By picking Mercado Libre in that 2015 sampler. It was six years after I'd first picked it. Yet, that was the new cost basis for the sampler, all 150 stocks picked in these 30 samplers, had new cost bases, and I was basically demonstrating letting your winners run and adding up because I was consistently picking winning stocks. Even if they didn't keep winning, that's always been my habit as a Rule Breaker investor. Finally, before we close Chapter 1, let me just say, why were we doing this? Why have samplers? Why pick stocks on Rule Breaker Investing? Well, the first most obvious answer was specifically to offer you, my listeners Rule Breaker thoughts, the platform of talking about Rule Breaker Investing and obviously illustrating that through stocks and stock performance themselves. That has been at the heart of this podcast for so much of its time. I'm not as focused on stock picking today, but we still talk about stocks just about every week. We have all kinds of illustrations and all kinds of important points to make. The reason to have ever picked samplers in the first place was simply to demonstrate for you, our free listeners, what we do through our services.

But the secondary reason for doing these samplers was to prove once again that Rule Breaker Investing beats the market. I realize we live in a world where many people think it would just be luck to beat the stock market. But whether you look at our scorecard in Motley Fool Stock Advisor, our scorecard Motley Fool Rule Breakers. If you go back to the original days with Motley Fool picking stocks on AOL, what we call the Fool portfolio. You can go to MotleyFool.fool.com and see my TMF Spiffy-Pop scorecard. I've tried to prove over and over again, in every arena I was invited to that you can beat the stock market averages. Even if you don't feel personally empowered to do that, even if you're not on that journey, you can just copy us. You can listen to what I've said on the podcast. You can follow our services and as they beat the market, you will beat the market as well. The Motley Fool exists to prove that the stock market is for all of us. We're here to democratize investing, to demystify it, and to provide you the power of market beating advice. That's always a second reason I'm doing anything to prove to a world that doubts that you can beat the stock market averages of Chapter 1, samplers. On to Chapter 2, which has to be entitled Results, because that's the obvious first question. How do we do? Again, 30 baskets of five, therefore, 150 stocks picked over six years. It was a strong overall market, those six years. Since each of these baskets was basically picked for a three year period, the S&P 500 average across all 30 of these individual samplers. If you just look at how the market did, on average over three years, it went up 42.8%. That equates to a 12.6 annualized rate of return. That's a good above average market performance over the course of 2015-2021. But it's not enough just to have a strong market.

We're trying to have strong stocks beating those market averages. That is the point of our 35 stock samplers. Over the course of those six years. Of the 30 samplers, 27 of them were picked for our standard three years. One was picked for one year, one was picked for four, and one was picked for five. But for the most part, this represents a three year game that we were playing. Let's pick stocks today, and let's see three years from now, how do we do? Did that stock beat the market? Did the overall basket beat the market? Yes or no. Let's talk about the performance. Let's understand why Peloton did what it did or NVIDIA did what it did. Let's learn together. That's the whole spirit. As you look over these results, know that 27 of these 30 were over a three year period. One of those others was five stocks for the next five years. The very first sampler I ever picked, that was a five year game about the market's performance in that year ahead. I said, hey, let's take little risk with this basket of five stocks sampler Number 6. But other than that one for one year and that one for five years, they were all for three year periods.

Now, over the course of those 30, how many of them beat the market? How many of them lost to the market? The answer is 19 won and 11 lost to the market averages. 63.3, probably three repeating percent of our samplers beat the market. It reminds me of another of the habits of Rule Breaker investors, Habit Number 6, aim for 60% accuracy, as I've said over the years. In general, when you pick stocks or pick a portfolio, you're going to be taking some risk, especially if you're a Rule Breaker investor. But don't take silly risk. Don't take stupid risk. Take risk where you think, there's a 40% chance I'm going to lose the market, but I'm 60% or more confident that we will beat the stock market. Even if it doesn't end up being those percentages in your actual practice, I'm talking about your mind set. You should have an aim for 60% accuracy. It's lovely in retrospect to think that over the course of those 30 samplers, 63% of them beat the market. Long time listeners will know we were on a raging high in early 2021 when the market topped that first year into COVID. It was remarkable. I'd picked 27 at that point, and of those 27, as I was doing Reviewapalooza in early 2021, 25 of the 27 were beating the market averages. I myself was astounded to have a 93% success rate. I think I said at the time, I don't think this is sustainable, and indeed, it was not. We've ended up with 19 of our 30 beating the market. Of course, the more important question is, by how much? The stock market averaged over the course of those 30 baskets, as I mentioned, a 42.8% return. I'm going to declare this a success if we pick stocks that were up 42.9% on average or higher. I'm very happy to say that as a basket, as a group of 150 stocks, they averaged a 75.5% return, meaning we outperformed the market averages by 32.7 percentage points per stock, across those 150 stocks. Of course, some beat the market by a lot more, and some lost very badly to the market. But when you average them all together, you end up beating the market by 32.7 percentage points per stock. I like to multiply things, so if you think about it this way, 150 stocks, multiplied by 32.7 gets you to right around 4,900 combined points of what we can call Alpha. Every time you beat the stock market by one point, if your stocks up 11% and the market's up 10, you just generated plus one of Alpha. We generated 4,916 points of Alpha over top of 150 different stocks. I wish in retrospect, every winner had been bigger. I wish in retrospect, every loser had been smaller. At different points, we were higher or lower, but I'm very happy and very proud to say that these 35 stock samplers wamped the market by a couple of dozen percentage points each across six years and across more than 100 stocks. That's the end of Chapter 2. Chapter 3, let's just call it Themes.

Because it was fun to pick a theme for each of these 30 five-stock samplers. It was fun and it was helpful. Now, I don't think you need to theme your overall portfolio along a certain theme. For example, one of them was Five Stocks Celebrating the 2018 World Cup. Nobody needs to build a portfolio that celebrates the 2018 World Cup. But the creative choice each time, we did this every 10 weeks or so, what will we call the next sampler that's fun to look back on. Some of my favorite themes, as I think about it, Five Stocks That Will Let You Eat Cake. By those, I meant companies that don't involve trade-offs. A lot of people have a trade-off mentality in life. They think if you do that, well, that means you won't be able to do that, you can never win both times. But I love situations in life where we can, as the saying goes, have our cake and eat it too. A good example, applied to the stock market that speaks to one of the stocks in that sampler, imagine if I gave you this option, would you rather have the company that is the number 1 e-commerce player globally or would you like to invest in the company that is the number one cloud computing business globally? Would you take the first or the second? The good news is you don't have to choose. You can have both because, of course, Amazon.com is and has been that company. Five Stocks That Will Let You Eat Cake featured companies that really give you both. You don't have to trade-off to pick one good thing over another good thing. You should always be looking for the win-win. Another fun theme, I went back to this one a few different times.

Five Stocks Feeding the Bear, Five Stocks Feeding the Next Bear. A lot of times people will start saying the market is high. Look how high NVIDIA is right now, people will say. Obviously, the market is going to come down to Earth. This is not sustainable and I understand at different points, market rises are not sustainable, but I also love to pick stocks in the face of people telling me that the stock market is going down. So those five stocks that would feed the bear each time, we got some good results off of those and I especially like to do it smiling in the face of supposed on-coming doom. Another fun one I think back on was Five Stocks that are good, and the trick to those five were all five start with the letter M. That's all. I just looked across stocks and Stock Advisor and Rule Breakers, our Motley Fool services, and said, "What are five that start with the letter M that I really like?" I'm happy to say their performance was indeed good. Not all of these were winning, of course, 11 of them lost to the market, and some quite badly. I still regret Five Stocks for the Age of Miracles because I do believe that's the age we're living in right now. As we make so many gains in understanding health, and disease, and genomics, and better practices, there are so many miracles happening around us to that will continue, that will effloresce, we'll see more. Cancer will eventually be cured. We'll figure out all kinds of handicaps, the way we can stop those handicaps. I'm sure we'll play around with genes as well some. I hope we won't mess up too much.

There are miracles around us today and more are coming, and I just wish I'd pick five better stocks that didn't lose so badly to the market averages. As I wind up Chapter 3 themes, I'll just say, it's a fun way to think about investing at different points. What is a small basket of stocks that would pursue semiconductors or would pursue East Asian companies that you might admire? These themes really are kind of endless and just involve, in a lot of cases, our own curiosity. I'm just looking one more five stocks for America since we just came out of independence week, and we had a lot of fun sharing last week on this podcast what you've done to create financial freedom over the last year. I picked five stocks for America in June of 2020. I regret that basket lost to the market as well. I hope America keeps winning. Let's move on to Chapter number 4. Chapter number 4 reflects on the single craziest five-stock sampler of all. Again, longtime listeners will immediately know what I'm talking about. We have a lot of new people coming on every week. So let me just point out that Five Stocks for the Coronavirus, which was picked in April of 2020, think back to where you were and what was happening in the world in April of 2020. Five Stocks for the Coronavirus went through the most amazing outperformance and then underperformance. It experienced the greatest whipsaw that I have ever seen, not just in the nine years of this podcast, but in my entire life. Quickly to review, the Five Stocks for the Coronavirus in alphabetical order by company name were Peloton Interactive, Roku, Sea Limited, Teladoc, and Zoom Video Communications. One year after I picked those, so April of 2021, those five stocks were literally up 240% per pick on average. That means if you were up more than that, a few were up less. But on average, in a single year, those five stocks more than tripled. The stock market had done pretty well itself, it was up exactly 50% year-over-year. That was the end of year one as we did a Reviewapalooza episode in April 2021. When we next joined in and looked at these in April of 2022, those five stocks were down 1.7%. In a single year, Peloton, Roku, Sea Limited, Teladoc, and Zoom went from more than tripling to being slightly underwater as the stock market basically had treaded water, it was up 52% at that point over the two-year period. So what had been my greatest five-stock sampler of all time, and it wasn't even close and we did it in one year, all of a sudden, it became my worst and things did not improve as we closed this one out last year, April of 2023.

History will show these five stocks were down 24.2% with the market up 49.3%. They became the most underperforming of all of my 30 historical five-stock samplers. By the way, it's not any prettier today. Chapter 4, which is the chapter we are in right now, we'll call it Crazy Coronavirus, that's the title of the chapter, speaks to Year 4, and that's where we are right now with these stocks. At this point, Peloton is now down 87%, shocking, extremely disappointing. Teladoc is even worse, down 93%. The market, by the way, now in its fourth year from the original pick date for this five-stock sampler of the market, is up 102.9%. These stocks have lost almost all of their value. Of the five, only Sea limited is even up, it's up 62%. But given that the market is up about 103%, that itself has underperformed. I'm happy to end Chapter 4 right here. I don't want to talk about these stocks anymore, but it is an incredible lesson about the volatility that can sometimes hit you in ways you would never even believe. Again, this is not normal. This is something in my 58 years I had never seen before and I doubt I will ever see again, a basket of themed stocks rise so high, so fast, and so quickly give it all back and more and end up in a dark place. Five Stocks for the Coronavirus. Let's move on to Chapter number 5.

Chapter number 5 connects back into Chapter number 4. We've just turned the page, and we're going to stick with the same theme. Chapter number 5 is called Losers, and it's a hallmark of Rule Breaker Investing. While I'm not ever happy about picking a losing stock and I take no pride in losing many times in the past, I'm sure many times in the future, I will say, as an investor, if you're a Rule Breaker, you need to learn to lose to win. In fact, one of my favorite podcasts I've yet done in our nine years was on November 18th of 2020. Check it, it was called Losing to Win. I totally recommend that to anybody. Especially if you're new to investing or new to this podcast, you really need to understand what losing feels like, the power of losing, and you need to know it proceeds winning. It marches alongside your winners. The good news is losers can't march that far. Winners always run laps around the losers. The worst a loser can ever do is lose 100%. You just heard me say Teladoc is down 93%, so I've gotten really close to that with some of our five-stock samplers. The worst you can ever do is lose 100%. Horrible news. Much better news for you, the best you can ever do is infinite. I picked NVIDIA in November of 2017, it was our 12th historical sampler. That was one of the Five Stocks That Will Let You Eat Cake. NVIDIA from that point is now up 2,347%. More than 2,200 points of Alpha, way beyond the market averages, just a single stock pick. Do the math with me, let's take the four worst samplers I've ever picked in our podcast history. I've already named most of them. You already know Five Stocks for the Coronavirus. On average, each of those five stocks underperformed the market by 74 percentage points.

Five Stocks for the Age of Miracles 2019, on average, those five stocks underperformed the market by 65 percentage points. The other two, Five Stocks rolled Up at Random, maybe something you shouldn't do too often, and Five Stocks Pursued by a Bear, that was the 30th and final five-stock sampler I picked in June of 2021, those were both really bad baskets. The first one was down 52 percentage points on average, and Pursued by a Bear was down 45 percentage points on average.

Quick math with me, I apologize for the math I'm throwing down in the podcast this week. I realize this is an audio medium. Math, for a lot of people, isn't their favorite thing to listen to. Although if you're a baseball fan like me, you love it. Let's do some quick math together. I just gave you the four worst samplers of all time. Four samplers equals 20 stocks. Let's say, on average, those 20 stocks lost to the market, this is right about on point, by 60 percentage points, 20*-60 is -1,200, which is horrific. You've just gotten the four worst samplers of all time, -1,200. That one NVIDIA pick in Five Stocks That Will Let You Eat Cake in 2017, that one NVIDIA pick is up 2,200 points of Alpha. So you can deduct the 1,200 that the four worst samplers altogether represent, and you still have a +1,000. That's just off my biggest winning pick across all 150 of these.

There are others, too, and that's why I want everybody listening to me right now to understand it's OK to lose. So much of the rest of the world, I would submit, especially people new to investing and understandably so, hard-wired as we are with our human psychology, so many people are so afraid of losing. Even just to have their first stock go down 20% or 50%, maybe they've paid for a Motley Fool service and their first stock is down 25% after a month, they'll often call our customer service line saying, "I think I want to cancel because I'm losing." I just want anybody, especially new investors to know, it's OK to lose. The key is to hold on to your winners, one amazing winner, and we have a bunch of them. One amazing winner will wipe out every losing pick you've ever made and leave you profit on the table. That's the secret that most people miss because they're not playing the long game. Most of our financial cable TV shows, most of our financial journalists, and frankly, most Wall Street investors are playing a very short game, so you never get exposed to the beauty of this the greatest secret of all. In passing, as we approach Chapter number 6, let me just say, in that same Five Stocks That Let You Eat Cake, I had two horrifically bad picks.

Right alongside some of my greatest picks, I picked 2U, which is also down 93% since I picked it. Another of my favorite companies at the time, Match Group, has lost a substantial amount as well. Sometimes your winners and losers were picked on the same day in the same market conditions and have radically different outcomes. But I hope you've heard me clearly here in Chapter 5, radically different outcomes is great news for anybody who holds because your winners will crush your losers. Let's move on to Chapter number 6. All right, on to Chapter number 6. I'm sick of talking about losers. Let's talk about some of our favorites as I think back on what were three of my favorite five-stock samplers. Well, I've already mentioned one, Five Stocks That Let You Eat Cake, we've talked about that one.

But typically, my favorite ones are the ones that did the best. So you are my favorite five-stock sampler if you went out there and crushed it. I have to mention Five Stocks the World Needs Right Now. It was February of 2017, we were coming out of a hard election in 2016, a so-called divided America. There was fake news and other things, and I was asking, what are some calming forces in our society? People are worried, understandably, about the condition of our environment and planet Earth. So I picked Five Stocks the World Needs Right Now. One of them was a real loser, Alkermes, which is a biotech company we won't talk about right now. But with the stock market up 137% over the succeeding four years, this was one of the three that was not for three years, it was for four years. I was thinking four more years, maybe a political slogan, but it was February 2017 to February 2021, and this group of companies in particular, I'm happy to say I picked Tesla because I was thinking about our environment and a company the world needed right now, and just Tesla on its own a 14-bagger over those four years, made Five Stocks the World Needs Right Now our number 1 performer. I also want to speak to five stocks that got trouble, another of my favorite performers with the stock market up 73%, this basket of five companies, all of which started with a capital T that rhymes with P and stands for a pool for those who know the music man. Anyway, Five Stocks That Got in Trouble was one of my silly groups of stocks, all of which started with a letter T. Again, I'm very happy to say, though I didn't have Tesla in this one, I did have The Trade Desk, which was an eight-bagger for this group of companies.

A lesson learned from our favorites is often it was just one shining star that would pull up all the rest around it. Of course, I'm always trying to hit a home run with all five of them, but the reality is you usually don't hit five home runs. If you hit one, it can make a five-stock sampler or your overall portfolio over time a huge winner, and I know many of you, especially those who own Amazon or NVIDIA, understand exactly what I'm talking about. A bonus fourth favorite, as I look back over this list, Five Stocks That Feed the Bear. I love to think back to that one. That was the third one we'd ever done. It was February of 2016.

Over the previous three months, great big companies, Apple, Amazon, Disney, all of them had lost 20%, 1/5 of their value in just the previous quarter. I was saying at the time, I think we might be six months already into a bear market and we were talking about what stocks you'd want to own to feed the bear. So in that podcast, I specifically looked for companies that had lower risk ratings. Risk rating is something we've talked a lot about on this podcast. I like to estimate the risk of holding stocks. I like to look fundamentally at the companies and put a risk rating on them. That week, for the podcast, I was specifically, of course, focused on lower-risk companies because if we're going to be in a bear market, it's better to have lower-risk things than higher-risk things, but I also paired that with a second attribute we were looking for in those five companies, and that was smaller companies. Often, larger companies are safer just because they have more heft, more ballast. They have more employees, more partners. They have bigger balance sheets. Smaller companies are usually more vulnerable, but if you can find very low-risk small companies going into a bear market or midway through, as the market recovers, those often can be superhero stocks and the five companies that I picked in that third sampler were Carter's, that's right, the baby clothes company; IPG Photonics, the laser company; Ellie Mae, which had its mortgage platform for mortgage brokers; Planet Fitness, I think we all know what that one does; and fortunately, Mercado Libre. Three of those companies went on to beat the market; two lost. But since one of them was Mercado Libre, such a spectacular performer for me in many different contexts over the years. That four-bagger, actually, Planet Fitness, pretty much four-bagged along with it, carried Five Stocks to Feed the Bear. Sometimes it wasn't just about picking stocks that would start with the letter M or T. It was looking for specific attributes here, low-risk ratings and smaller market caps at a certain point in the market cycle that happened to work really well for us. Let's move on to our final few chapters, Chapter 7. Chapter 7 let's entitle Re-upping.

I already mentioned habit number 2 of the Rule Breaker investor, that is to add up, don't double down. When I look at my portfolio, I have new money coming in and I think I want to add to one of my existing holdings. I think most of the world looks at its losers and says, which one is going to get back to even? That's where a lot of people allocate their money. But as a Rule Breaker, I've always tried to subvert that to go against that conventional wisdom and specifically look for the best performers. When shown a list of stocks making their 52-week highs versus stocks making their 52-week lows, in my experience, maybe yours, most people will say, well, show me the list of the 52-week lows because those are the ones I want to buy low and sell high. But having learned this from William O'Neil, the author of the book How to Make Money in Stocks, I know, and I've tried to teach it and share it for a couple decades now, I know to look at the stocks making 52-week highs when we talk about which ones we want to invest in or add to. Part of the key learning, something I had to include in the Reviewapalooza Ultima this week, is my tendency to reup certain stocks across multiple samplers. I think the king of these was, just mentioned it, Mercado Libre. In the 30 samplers I picked, I picked Mercado Libre in five of them. So if you think about the 150 stock picks I made, five of those 150 were a spectacular performer. Tesla appeared in three different samplers, so three of the 150 were Tesla.

More established companies like Alphabet represented many times. Some of my big winners, Booking.com, appeared a couple of times. Netflix, one of my great all-time stock picks. I think it's my personal largest holding today. Netflix, I only just picked once out of those 35 stock samplers, but the main point is to find the winners. What do winners do? The punch line goes: they win. Find the winners. Let them keep winning. Don't sell them. Don't cut the flowers and water the weeds. Water the flowers, cut, or ignore the weeds. The reupping that we did across these five-stock samplers, while it wasn't fanatical and it didn't happen mechanically or every time, if you look back through the results, you see a reliance on certain companies that we really believed in that were winning really well through this period. Sometimes they had death-defying drops. NVIDIA itself, check it in the last few years, everybody's favorite stock today and one of our greatest performers of all time at this point has had some really death-defying drops over the last few years, let alone the last 20 years that we've held it.

So that's going to happen, too But I think the act of adding up, not doubling down is darkly underlined, highly emphasized if you look across the data and you think back through these episodes. Speaking of reupping, it's worth pointing out, every Rule Breaker Investing podcast is available, I hope, forever. This one, by my count anyway, is podcast number 472. But for anybody who found themselves interested in what a given five-stock sampler was, what I was saying at the time or the Reviewapalooza that we would do, one, two, and three years later, all of those are reuppable by you, relistenable at any point. That's part of the beauty of the Internet and the treasure trove of content that exists, I hope, forever, starting somewhere around the year 1995, as the World Wide Web started to become popular. I wasn't just reupping some winners here and again, I hope proving out an important point. You can reup any of these podcasts in the past and if you, by the way, do listen to an old one and you pull a lesson that I've forgotten about, a winner or a loser, we have a mailbag, RBI@Fool.com is our mailbag. I always love hearing from you, and I feature my favorite letters at the end of each month. So anybody who wants to spend any time spelunking back through our 35-stock samplers and pull additional lessons, I'm happy to add them to these 10 1/2 chapters. Let's move on to Chapter number 8.

Chapter number 8 is entitled Silly Fun because it was silly and it was fun. Somewhere around halfway through, I started realizing rather than just say this sampler is finished, we created Foolhalla, kind of like Valhalla. Except instead of it being for the Norse gods, I just decided we should send these five-stock samplers off into their afterlife, into glory. So Foolhalla was born, and my producers Rick Engdahl and Des Jones honoring that with themed music to celebrate the ascent of these part of the silly fun of our 35 stock samplers. Another silly moment. It was April 19th of 2017 and I picked five stocks, and anybody who'd been listening for a while got used to me having a meaningful theme like Five Winners in a Thinking World or Five Stocks to Feed the Bear. As I did the ninth five-stock sampler in this podcast's history, it wasn't clear at all what united these five stocks until you realized that it was an acrostic. The first one started with a letter A, the second with a letter P, and RIL. So five stocks that April.

Then we found out that there had been the first ever live birth of a giraffe on the Internet, speaking of a treasure trove of content that will exist forever. I think it was that month, and they decided, the owners of that baby giraffe, to name that giraffe April. So Five Stocks for April the Giraffe was born. So there's the etymology of that five-stock sampler title. I also just want to mention the word reviewapalooza. Of course, we're having our final Reviewapalooza Ultima this week, but a fun word we first used it. I was checking February 20th of 2019. Emily Flippen was there reviewing stocks from the previous year, and we decided let's call this a Reviewapalooza. Of course, we've done the very first review one year after picking five stocks for the next five years. That was in September 2016, but now I'm starting to get back into history, which is probably not that interesting to listen to. But suffice it to say, it has been a tremendous amount of fun to have brought you each of these samplers, and then if there were 30 of them and we reviewed each three times, 90 Reviewapalooza moments over the course of these nine years of Rule Breaker Investing. Let's move on to Chapter number 9.

All right, onto Chapter number 9. Chapter number 9 is entitled The Long Game. I'm still tracking. I've referenced this sum over the years. Again, regular listeners will know that I've been doing this, but many may not. Sure, each of these was picked for three years or, in some cases, one, or four, or five. Sure, these were just for a few years, and I think understandably so. But the real beauty of Rule Breaker Investing isn't that you picked one year of good stocks into the teeth of a bear market or that you had a good three-year run before, during, or after the coronavirus. The real beauty of Rule Breaker Investing and investing at large truly investing is holding things for long periods of time. Of course, I'm proud to have said earlier in Chapter 2 results. Proud to have said that these 150 stocks each averaged a 75% gain against the market's 42% gain, but that's only the short-term story, and I wouldn't be me if I were just tracking over short periods of time. Of course, every one of these samplers I typed into a spreadsheet, and I continued to maintain that spreadsheet to this day. Some of the stocks have been bought out.

For example, FireEye, which was a pretty poor stock pick of mine, got bought out by another stock that we also picked in a different sampler, that would be Alphabet. Google bought FireEye, Mandiant a few years ago. So in the spreadsheet, that all came after the last Reviewapalooza. But in my spreadsheet today, I've represented exactly what the price was and what the performance has been. So I continue to track all 150 of those stocks. That's my announcement for Chapter 9. We're playing the long game. I'm still tracking; you should be, too. With every Reviewapalooza, including this one at the top of this week's show, I said you don't think we're just playing for three years. All of these stocks are stocks that we keep holding onto in real life. You should, too, if you own them, and I even mean the losers, too. I often hold on to my losers because if they really lose, they become irrelevant. Of course, anytime you feel you could invest your money better, it's fine to sell a winner or a loser. I have no problem with selling, but most people do it far too often. A reminder with Chapter 9, we're playing the long game here and I'm still tracking. On to Chapter 10.

Chapter 10 keys into Chapter 9, I'm still tracking. You might wonder, well, how are we doing? I'm really excited to let you know the updated numbers. These are just under the assumption that you should have continued holding if you owned these stocks all the way through. You didn't sell the day we ended the three-year contest; you just kept holding. So some of these stocks, the initial ones picked in September of 2015, next year, that sampler will turn 10. We're still holding, I hope you are too. Here is the numerical performance across these 150 stocks, accounting for every day since each of them was picked. The stock market averages over this roughly six, seven-year period or so a 102% gain. You can take all 150 of these stocks and see their performance overall against a 102% gain, and they're now up 168.4%. In other words, what used to be 33 percentage points per stock beating the market has now grown just a few years later to 66 percentage points. Fun moment just this afternoon, the combined points of Alpha, if you multiply how much we've beaten the market by all of the stocks, as we went to record today, that number hit 10,010. We closed out our five-stock sampler experiment with those three-year gains with plus 4,900 points of Alpha. Really proud of that. Very happy to let you know it's now just over 10,000 points a few years later. That is not surprising. That is exactly my experience as an investor, in the same way that a lot of these stocks I was picking in 2005 or '08, but only for you free on this podcast years after that, they did beautifully from 2005-2015.

Well, those same stocks are doing beautifully, enough of them, from 2015-2025 that we're even higher, and that's exactly what compounding returns will do for you. I'm going to call Chapter 10 the Crazy Fun New Overall Numbers. It's a form of crazy fun, but again, anybody who's truly investing, that is in it to win it for the only term that counts, the long term, anybody who's doing that should experience this. I predict five or 10 years from now, if this podcast is still going, we can look back at these 150, I'll have them in my spreadsheet, and they'll be up more than 10,000 points of Alpha where they are today, which is already so substantially better than what most people expect from stock picking, which is that you wouldn't be beating the market at all. Chapter 10 1/2. Chapter 10 1/2 is just a half-chapter. I don't know what we'll do next with this. We continue to talk stocks a lot on this podcast, and I love stock picking and games, even though I'm not doing it personally, directly, professionally anymore. I would be loath to start samplers when I myself don't fully have my eye on the ball, but I do have a lot of friends who do. You hear from them regularly on this podcast, whether they're Motley Fool employees or outside investors, business people, authors.

There certainly is potential to restart a new game, and I thought a lot about that in the last couple of years, and I imagine we will do something at some point. I could also imagine some periodic Reviewapaloozas of these 150 stocks to detail some of their movements, maybe clump them up and, a couple of times a year, look back because while it's exciting to celebrate three-year performance and be right there in the game, we're really playing the three-decade investing game. I hope you are, too. It grows more and more valuable to look at how these stocks do, and what numbers they can generate, and what stories they have to teach us. There it is. We can now turn the last page on this week's podcast, our Reviewapalooza Ultima, in 10 1/2 chapters from themes and stock picks emerged performance. That performance was tracked transparently and regularly over many years, and that continues.

We often were losing to win. I shared the names of some abysmal stock picks of mine earlier in this podcast, and yet you see the overall numbers now. All of it was conveyed orally through this podcast from one week, one quarter, one year to the next. Some of you have been there with me all the way through. Now you know the final accounting, and some of you joined midstream, and some of you are just hearing this for the first time, but these 35 stock samplers, I don't think, could be a better advertisement for what I've said, and taught, and picked, and reviewed, and shared via this wonderful platform of Rule Breaker Investing and the numbers, and this is no surprise. This is logic. This is what you should expect. This is what happens, what has happened, and what will continue to happen over the years, tripping over 10,010 points of Alpha. The very afternoon we recorded this Ultima podcast is the very sort of fairy tale ending that we can only dream of until sometimes our dreams come true. So to the next 10,000 points of Alpha with your Rule Breaker Investing stocks. Fool on.

Suzanne Frey, an executive at Alphabet, is a member of The Motley Fool's board of directors. John Mackey, former CEO of Whole Foods Market, an Amazon subsidiary, is a member of The Motley Fool's board of directors. David Gardner has positions in Alphabet, Amazon, Apple, Booking Holdings, IPG Photonics, MercadoLibre, Netflix, Tesla, and Walt Disney. The Motley Fool has positions in and recommends 2U, Alphabet, Amazon, Apple, Booking Holdings, Match Group, MercadoLibre, Netflix, Nvidia, Peloton Interactive, Planet Fitness, Roku, Sea Limited, Teladoc Health, Tesla, The Trade Desk, Walt Disney, and Zoom Video Communications. The Motley Fool recommends Alkermes Plc, Carter's, and IPG Photonics. The Motley Fool has a disclosure policy.