| February 14, 2016 Hi fellow Fool - While The Motley Fool has built its reputation on decades of picking excellent stocks, the plunging market in recent weeks has been a good reminder of one critical fact: Investing isn't just about picking stocks. Because when markets are going crazy - if you're missing a critical skill shared by the world's greatest investors, stock picking quickly becomes useless. How important is this skill? Well, without it, you could be the best stock picker in the world and still lose money. I'll even take it a step further. Without this skill, if history is any indication, I could give you the single best stock pick over the next 20 years and you'd lose money! But hey, I probably would have lost money on it too. Here's how. Monster returns Let's look at one of the best stocks over the past 20 years. Between 1995 and 2015, Monster Beverage (Nasdaq: MNST) racked up an astounding 105,000% return. $10,000 invested in it turned into more than $10 million! Sounds like the ticket to a life of sipping pina coladas on an exotic beach, right? My friend and Motley Fool One analyst Morgan Housel crunched the numbers on Monster's epic 20-year run and described it much differently than a dream... He called it a "gut-wrenching nightmare." Analyzing Monster's last 20 years, Morgan found the following: - Monster traded below its all-time high on 96% of days.
- On average it was 26% below its previous highs!
- Monster dropped by 50% or more... FOUR TIMES.
- It even dropped by more than 75% once!
I could continue with the ugly big-picture numbers.... But let's just look at a chart assuming you were "lucky" enough to buy Monster on its first day trading: August 18, 1995. The chart of nightmares That's an ugly stock chart! From September to March, Monster's share price melted down 58%! This is where you need to be honest with yourself... Would you have been able to stay invested through this period and not sold Monster? I can't say I would have... Think about how painful it is to check your brokerage account these days... And the market is "only" down 14% from its past year's highs. Now think about the pain of watching losses mount day after day on a small, unproven company... If you sold, you'd be left with a 50% LOSS instead of that gain of 105,000%. You'd have picked the best stock and been left with losses and regret. Now, that's a nightmare. Back to that critical skill Earlier I'd mentioned a critical skill shared by the world's greatest investors that sets them apart. That skill, simply put, is they're not stock pickers. For example, Motley Fool cofounders Tom and David Gardner are not stock pickers... They don't buy stocks to trade, they invest in great businesses. You're probably familiar with some of Motley Fool Stock Advisor's greatest recommendations. Companies like Netflix and Amazon that have seen returns as high as 4,409%. Sounds great, right? Well, the truth is Netflix and Amazon aren't so different from Monster Beverage. For all of them, there have dozens of times in the past decade that you could have bought them and quickly seen "nightmare" returns. Yet, the difference between Stock Advisor and so many "get rich quick" trading schemes on the Internet is that David and Tom only buy stocks their team has carefully studied and they believe strongly the businesses can succeed.... No matter if the market loses its mind in the short run. So, instead of panicking whenever these stocks sold off... David and Tom made the "bold" move of telling investors to hold tight... And sometimes even recommended they buy more. Between David and Tom in Stock Advisor, they have issued six different recommendations of Netflix that have returned more than 2,000%! And while no investor is going to achieve a 100% success rate - we have plenty of losers - that strategy has led to the average Stock Advisor pick returning 145.4%, more than triple the market's 43.9% return over the same time. At The Motley Fool, we've never said we're right for everyone. If you want to trade in and out of stocks ... I encourage you not to buy Stock Advisor. However, if this "unconventional" approach sounds like the smartest (and most stress-free) way to stay invested for the long run... To profit with a trusted advisor studying the actual companies you're buying instead of just picking ticker symbols... Then I encourage you to join the tens of thousands of investors who renew year after year with a smile on their face. Oh, and looking back at Monster Beverage, David Gardner ended up recommending the stock in one of his services back in January 2009. January 2009 was four months after Lehman collapsed. A time everyone thought the world was ending... Yet David was "bold" enough to recommend Monster Beverage at the time because he thought it was a great company that would weather the storm ... even if sales took a hit in the short run. Which sounds like common sense today. But it can be hard to remember what is common sense and what is unconventional while markets are plunging. After a little more than 100 trading days, David's pick of Monster looked like a dog, down 15%. Today, it sits on his scorecard as a 614% gain. Imagine finding the same success as those investors back in 2009, by finding and buying great companies, with the help of David and Tom. The market is losing its mind once again today. Which could mean Monster-sized opportunities are available. Which is why I urge you to give Stock Advisor a try today. I'm offering all readers of this column a 30-day 100% membership fee-back guarantee. Take a look, see what they have to say and the companies they love now. If you don't agree, cancel within 30 days and you'll get back your entire membership fee. Simply click here to join the hundreds of thousands of investors who are already profiting. I'll be back next week exploring the world of finance.   Fool on,
Eric Bleeker, CFA P.S. The market is in turmoil, and David and Tom Gardner have proven over the years that can be the best time to get in. Check out their advice by clicking here.
Having trouble seeing this email? View on Web We work fervently, feverishly, and Foolishly to make sure all the facts and figures we publish in our emails are 100% accurate and up to date. Total returns as of February 12, 2015 since Stock Advisor's inception in March 2002. S&P returns as of February 12, 2015. Returns as of February 12, 2015. David Gardner owns shares of Amazon.com and Netflix. Tom Gardner owns shares of Netflix. The Motley Fool owns shares of Amazon.com, Monster Beverage, and Netflix. To ensure you receive the latest and greatest from us, add Fool@foolsubs.com to your address book. Don't want any more emails? No problem... unsubscribe now, or change your email preferences here. This is a promotional message from The Motley Fool | 2000 Duke St. | Alexandria, VA 22314
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