In 1998 David Gardner and The Motley Fool introduced the world to Rule Breaker Investing. This unconventional buy-and-hold strategy has produced mega-winners like Amazon and Netflix, to name a few.
Here are all 6 traits 👇
Trait #1 Top-Dog and First Mover in an Important and Emerging Industry
These companies are steering the ship. They operate in industries that are shaping our future and focused on innovation. These are the companies doing what most think can't be done.
Trait #2 Sustainable Competitive Advantage
These advantages come in several forms. Some examples include patent protection, inept competition, visionary leadership, business momentum, etc. When a business has a sustainable advantage, it allows investors to play the long game (the only game that counts).
Trait #3: Strong Past Price Appreciation
Rule Breaker investors focus primarily on the business, but in this case, a stock that is performing well can tell us a couple of things.
The market recognizes what is happening.
The company is most likely operating effectively.
Trait #4 Good Management & Smart Backing
"Look for great people of great character who make wonderful decisions on behalf of all the stakeholders they oversee." -DG
Trait #5 Strong Consumer Appeal
"We have to look at the brands and ask, what are the best-known companies? What are the best-loved brands in the world? So many of our best stocks are those companies." - DG
Trait #6 The Stock is Considered "Overvalued" by the Financial Media
The financial media is only looking at things they can measure. A Rule Breaker investor looks at things that can't be traditionally valued or scored, like brand, innovation, and leadership. Over time, these are the qualities that drive value.
Reference: 6 Traits of a Rule Breaker Stock