OK, OK ... I can't blame you for wanting to win the
lottery. After all, who couldn't think of something to do
with, say, a big $20 million payout? All you have to do is
"invest" a dollar. It's almost a compelling thing to do.
Of course, few people call lottery-ticket purchases
"investments," and there's a good reason for that: It's
gambling, not investing. It's speculation of the most
hopeless kind. The odds of winning the Powerball Grand Prize
are 1 in 195 million! Let that sink in. Do you know how big a
number that is? Well, 195 million years ago, Stegosaurus
dinosaurs roamed the earth, during the Jurassic period. The
population of Brazil is only slightly north of 195 million --
and Brazil is the most populous nation in South America.
Heck, even the lottery odds of winning just a comparatively
measly $100 are more than 10,000 to 1.
Some more perspective
Now take a minute and ask yourself how likely you think
you are to die by a lightning strike. Do you expect to become
president? Are you bucking for an Academy Award? If those
things seem
veryimprobable to you, just think about how
improbable winning the lottery is.
Good news: You can win
anotherlottery!
Fortunately, if you'd love to see a modest investment
of yours swell into something huge, you don't have to hope
for something almost hopeless, like a lottery jackpot. There
are other jackpots you can chase instead.
Consider, for instance, Rule Breaking investing, a
strategy developed by Fool co-founder David Gardner, which
seeks out companies that offer "
The Highest Possible Returns. Period." He looks for
companies that are breaking the rules of the status quo, ones
that offer new and better ways of doing things. Think, for
example, of how
eBay (Nasdaq: EBAY) and
Amazon.com (Nasdaq: AMZN) have revolutionized
the way many of us shop. Think of how
Southwest Airlines became one of the few
profitable airlines by developing new ways of doing things,
such as just flying one kind of airplane. Even
Wal-Mart (NYSE: WMT) was a Rule Breaker once,
in daring to build big discount stores in remote, often rural
locations.
These companies are
the ones you end up wishing you'd bought 20 years ago,
and the ones that can turn
thousands into millions.
To find stocks like these, David looks for companies that
share these six traits:
David has been putting his system to work in our
Motley Fool Rule Breakers
newsletter, where his picks have been beating the market
handily, overall, since 2004. Of course, not
allof his picks are winners. That would be the case
with just about any set of recommendations -- but Rule
Breaker companies can be extra volatile sometimes. That's why
some of the newsletter's picks have fallen by more than 50%.
And that's why you'd never want to put all of your money on a
Rule Breaker stock -- although even
thatimprudent move is still less crazy than spending
a lot of money on lottery tickets.
However, on the whole, official Rule Breaker
recommendations have been outperforming the market by more
than 18 percentage points since 2004 because of the
jackpot-like returns they can deliver:
Intuitive Surgical (Nasdaq: ISRG) has
increased more than fivefold since being recommended in
2005.
A China-based technology company has more than
quadrupled in value since being recommended in late
2006.
Green Mountain Coffee Roasters more than
doubled in just about six months.
Of course, these are just short-term results. The real
lottery-like payoffs of companies like these comes after many
years of investing:
Company
20-Year Total Return
Microsoft (Nasdaq: MSFT)
6,682%
Best Buy (NYSE: BBY)
19,060% Continued... |