10 Years Later: 5 Stocks to Feed the Bear

Ten years ago, in the teeth of a downturn, Motley Fool co-founder David Gardner picked five stocks under the banner "5 Stocks to Feed the Bear."

In this podcast, David and longtime Fool Rick Munarriz revisit that full basket. Which stocks did David get really right? Which ones really wrong? And why?

To catch full episodes of all The Motley Fool's free podcasts, check out our podcast center. When you're ready to invest, check out this top 10 list of stocks to buy.

A full transcript is below.

This podcast was recorded on Feb. 11, 2026.

David Gardner: Ten years ago, February 10th, 2016, to be exact, I launched my third five stock sampler, Five Stocks to Feed the Bear. The market had broadly declined from August 2015 to February 2016. Many Rule Breaker stocks were down double digit percentages, and had we started? A bear market? Well, early on that week's podcast, I said, I thought a lot of the bad stuff had already happened, so it was time to pick some stocks, five stocks to feed the bear. Today, we fire up the time machine. It's 10 years later to see what actually happened through recessions, pandemics, acquisitions, and all the surprises a decade can deliver. We'll score our returns against the S&P 500, then ask the only questions that matter, what we got right, what we got wrong. Were we missing anything? Well, I've invited back my side kick who helped us launch this series Rick Munarriz to bring the goods, numbers, and stories. We're going to talk about the lessons that you can use on your next 10 year journey, so Five Stocks to Feed the Bear 10 years later. Only on this week's Rule Breaker Investing.

It's the Rule Breaker Investing podcast with Motley Fool Co-Founder David Gardner.

David Gardner: Welcome back to Rule Breaker Investing. I hope you had fun. I sure did with WIRED founder Kevin Kelly last week. I think that's probably a bestie for 2026. If you didn't get to hear our conversation, I completely recommend Kevin Kelly and his views of the future for your listening pleasure. Every 10 weeks we open a time capsule on Rule Breaker Investing. A past five stock sampler hits its 10 year birthday. This very week in 2016, I pick five stocks in the face of a possible bear market. Now here we are doing something you're rarely going to see on financial TV or podcasts or really any medium, reviewing the results 10 years later, the very week of. Has already foreshadowed this week, we're looking at Number 3 of the 35 stock samplers featured on Rule Breaker Investing over the years, and we're going to score each pick equal weighted from the original err date. We're going to see its return and compare that to the S&P 500 over the same span. Then comes the real work done this week by longtime fellow fool Rick Munarriz who's joining in this week with his best answer to this question for each of the five stocks. What is the single biggest reason this stock did what it did? We'll discuss together what the decade actually taught us all as investors. We will finish with the samplers overall result. All five stocks as a basket. How do we do? We'll probably provide a lesson or two. Maybe a quick go forward view on some of these companies. Now, if you're new here, this is our 10 years later episodic series, and that's what we're doing this week. Not just keeping score, by the way, though we are. We're here to learn together over the long game. Playing stocks the only way that counts, even if so few people seem to do this. The past is prologue. Let's light the stage, and welcome, Rick Munarriz. Rick, welcome back.

Rick Munarriz: I'm so happy to be here, David. Thank you for having me again.

David Gardner: Delight. I had so much fun kicking off with five stocks for the next five years, 10 years later with you, somewhere around exactly 20 weeks ago. Let's do it again. This time, Rick, well, the date was February 10th, 2016. You and I are recording this on February 10,th 2026, Tuesday of this week, literally 10 years ago, this very day. The sampler was five stocks to feed the bear. By the way, any listener can go right back now and listen to that Intrepid listeners, you can go right out there on Apple Podcast or Spotify and pick up what we were talking about, Rick. The stocks were Carters, IPG Photonics, Ellie Mae, Planet Fitness, and Mercado Libre. Those are the five stocks you and I are going to talk about. Before we get started, I should point out how the market has done. Rick, it's been a pretty good 10 years. Do you agree?

Rick Munarriz: Definitely.

David Gardner: Not every 10 years, do we get a 274.3% return for the S&P 500. As we speak, the market has more than tripled over these 10 years. That's what these five stocks are competing against a +274 in the win column for just the market averages. Now, before we get started, I want to mention that we were looking for two attributes with these five stocks. Let me just put them forward right now so listeners know what was happening 10 years ago. I was saying there are two attributes that make up this list of five stocks. The first is companies with a very low risk rating. Now, anybody listening to podcast a few weeks ago, you heard our calculating risk Foolishly, volume four, where we took you through my 25 point risk rating system, Etsy versus Duolingo. With that fresh in mind, know that that was the first attribute we were looking for with this five stock sampler, stocks with very low risk ratings. The second one was small cap companies. I was looking specifically for companies with a one to $5 billion market cap. I was saying, we love great big companies like Apple, Amazon and Disney. This is what I was saying 10 years ago this week, but each of those three had declined more than 20% in the previous three months leading up to that podcast. Things were pretty bad in February 2016. It's not every quarter that Apple and Amazon and Disney have all lost more than a fifth of their value in three months. But rather than go for the big obvious dogs, we were looking for smaller cap companies. As we are sometimes want to do Rick, please strap yourself in because, we're going back in time this week into the Rule Breaker Investing Time machine. Let's strap in. Stock Number 1, Carter's Ticker symbol CRI Carter's, of course, a long established apparel company focused on baby, toddler, and young children's clothing, including the well-known Carter's and OshKosh B'gosh Brands. It operates as a consumer brand with decades of trust, selling through retail, wholesale, increasingly through direct to consumer e-commerce. At the time, Rick, it was also beginning to expand internationally, including early moves into China. I liked Carter's as a multi generation consumer brand. Doing something timeless, clothing babies, while quietly compounding through e-commerce and global expansion. Rick Munarriz any initial reactions of yours to Carter's either back then or now?

Rick Munarriz: David, raising a kid isn't easy, but the same can be said about raising a kid apparel retail chain. [LAUGHTER] You and I we became parents around the same time in the mid 1990s, which was a great time to be a parent, I think. When I revisit the malls that I used to go to as a young parent, I can tell you where the Jim Bree store used to be. I can tell you where the Disney Store was. I even remember even the chains that survived, like Carter's and the Children's Place. Well, there are a lot less of them now than there used to be. I think just in general, the environment was tenuous then, and it's tenuous now.

David Gardner: I saw Eddie Bauer announcing bankruptcy, potentially unless it gets bought this week. I agree with that statement, Rick Munarriz. Well, let's go right to the numbers, then I'm going to ask you the big question. Here are the numbers. The stock on that day 10 years ago was at $85.04. Today, Carter's ticker symbol CRI has gone from 85.04-$38.07, I regret to say my pick is down 55%. Again, the market, up 274%. The Delta there, Rick, a shocking and very disappointing -329 to start this sampler review 10 years later. Rick Munarriz in your mind, what is the single biggest reason this stock did what it did?

Rick Munarriz: I'm going to cheat and go with a terrible twos theme as a toddler to justify giving you two reasons instead of one. I'll be quick on the first one. It's just a general there's a macro level. The US birth rate has been on a steady decline for years. Folks are waiting longer to have babies, and that usually means having fewer babies than their parents did. There was a surprising, not refreshing spike in 2024, but generally speaking, fewer babies today mean fewer toddlers and kids tomorrow. There's a real demand problem here. Second problem, the second of the terrible twos, and I think the real big problem here is the state of being a US apparel retail. You're talking about Eddie Bauer. Sachs is also in bankruptcy filing. There's a lot of companies that are struggling at the retail level. Textiles are sourced a lot cheaper overseas, and 75% of Carter's clothing is made in Vietnam, Cambodia, Bangladesh, and India. I used to have a little more in China, it pulled back from there a little bit, but still still a case where back in October, Carter's pointed out that new tariffs and import duties have increased costs by 200 million to 250 million on an annualized basis. Carter's did not want to push all those costs through, so obviously, that's hurting margins. This is also coming at a time when the company's sales are declining slightly in each of the past four years. Now it's just experiencing a bigger pinch in margins with these new costs to absorb. Announced in October, that's going to be closing 150 stores in the next three years. Not only is Carter's already starting to shrink a little bit from where it was 10, 20 years ago, it's happening. It has a substantially higher wholesale business which has a higher margins for the company so it's just a Carter it's been more B'gosh than OshKosh lately, David.

David Gardner: Well, it's regrettable, Rick, as I mentioned, I was looking for companies that were smaller cap companies. This company speaking of Market Cap, the Market Cap Game Show, of course, it's March Madness coming in just a few weeks for this podcast, as we'll play the Market Cap Game Show with some world champions. But this company's market cap down to $1.39 billion, Rick. We're talking about a micro cap company at this point. Of course, I was looking for 1-5 back then. Since it's down 55%, it was somewhere, around 3 billion then. This company has lost a lot of value, and it's lost a lot of relevance.

Rick Munarriz: A lot of teething.

David Gardner: That's what we have for Carter's Rick. Maybe at the end, you and I will give maybe, which is our favorite stock of these five today going forward. Just flagging that. Let's move on to stock Number 2, IPG Photonics Ticker symbol IPGP. Now, IPG Photonics designs and manufactures fiber laser systems used across industries like manufacturing, medical devices, telecom and battery production, and its fiber lasers were displacing older laser technologies by being more efficient, more reliable, and lower cost. The company was founder led by Valentin Gapontsev and had built a dominant position in a highly technical niche. My recollection, Rick Munarriz is this company was a multiple times pick for Motley Fool Rule Breakers, and I liked IPG because it was founder driven. It was a category leading technology company benefiting from a long-term shift toward superior technology. Fiber lasers across many industries, Rick. Any initial reactions from you to IPG Photonics then or now?

Rick Munarriz: Lasers always sound cool, and you think it's Star Wars or like laser cats. But again, so these are sort of these cool, cool lasers that they're used to weld and cut industrial materials. IPG Photonics, even though they have increased their presence, and they're growing faster in, like, medical innovations and a lot of emerging industries, materials process basically old industry, industrial commercial work in factories and whatnot, still account for 88% of the revenue mix. Still a company stuck on a business that is a steady but not as exciting as its itseer side project.

David Gardner: Well, thank you for that and let's now look at the numerical performance before I ask Rick the question. Stock was at $81.59, 10 years ago today, 81.5. Today, it's $113.26. All of my market prices are somewhere around 230 Eastern, Tuesday, February 10th, so 81.5-113 up 39%. Now, that's, sounds OK. It's a lot better than Carter's. But again, the market was up 274% so, Rick, I regret to say stock Number 2, a -235 in the loss column when we're counting up Alpha. Let me put it to you this way, Rick Munarriz. If you had to explain what happened to IPG Photonics to a smart 25-year-old, in one sentence, what would you say?

Rick Munarriz: Four out of five years of declining revenue can't be good. Does that work?

David Gardner: That doesn't work for me. I also regret to say, and I'm quite serious about this. God rest his soul, Valentin Gapontsev the founder is no longer with us. He was a phenomenal American entrepreneur Russian born. Really, this is his company. He's not around anymore, but I'm still cheering him on, Rick, and the company stock is up, but declining revenue not a good thing.

Rick Munarriz: This is a company five years ago, Well, back in 2021, so 4.5 years ago, whatever it is you call the year, annual sales were $1.5 billion, almost $1.5 billion. Trailing revenue now is less than a billion. It's four out of five years of declines, and you do get pinched. There's some competitive threats in China. Europe in general has been weak for a while for its products, and I always like to find the blue sky in the red ink, so I want to be at least a little more positive here on the IPG Photonic story. That's it after 12 consecutive quarters of year over year declining revenue, IPG's top line moved 8% higher in the third quarter of 2025, the one it just announced a couple of months ago. When it reports its fourth quarter results on February 12th, which will be the day after this podcast goes out, hopefully, its earlier guidance suggests another uptick in revenue. It's going to hopefully continue this positive movement. But again, when you've been declining for so long, investors want to see a more pronounced recovery, but it definitely feels like it's at least starting to turn the corner. Definitely in Asia and in the US markets, Europe is still lagging, but it's still making a bit of a comeback. But again, that explains why the stock's been out of favor. It's industrial materials processing. It's been a rough place to be the last few years.

David Gardner: I'm not a short term player, and obviously, 10 years later is all about the long-term, but I will note. I'm not keeping up with IPGP on a regular basis right now, Rick, but I will note this stock started the year in the low to mid 70s, and it has been unbelievable. In the first 40 days or so of this year, it's gone from the low 70s-112. This has to be one of the best technology performers, at least in its industry, I'll say, in the world today. I want to pin down on one thing you said just a minute or two ago, Rick, because I want to understand why. I share it, too, but I want you to make it explicit. You said you want to look at the positive. You want to find something that's positive that you can say about this company. I'm just curious why do you say that? Why do you even have that orientation?

Rick Munarriz: I think, again, as an investor, it's OK to be a Pollyanna, which I can be sometimes, and you tend to be that way when there's stocks you pick and believe in. While that could be sometimes a curse because, hey, you miss something obvious, and you get through this case where this company's had 12 consecutive quarters of bad results year over year, and I find this one positive thing, and I stick to it. But it's always good to have hope as an investor, as long as you're learning from the steps down. I think every IPG Photonics investor has learned painfully the lessons on the way down. But I think it's important to always grasp the fact that things could always be worse, things would always be better in life as well as in investing.

David Gardner: I so appreciate that point. In fact, in my book Rule Breaker Investing, I explain why, and Rick knows this very well, having worked alongside me for 20 plus years, why we have five green flags that we're looking for when we flag the things that we're researching a company for. I say, Look for five good things going forward, and three red flags. Some people are like, why are you looking for five good things and three bad things? I think it's because you're looking for winning stocks. I mean, we're looking for what's going to win and work out there. I don't find balanced view particularly helpful. I think we should lean toward optimism, especially as rule Breaker investors, and I'm joined this week by somebody who knows that as well as anybody else that I've ever worked with. Thank you for that comment.

Let's move on to stock Number 3 and see if we can get, I don't know, a little bit better because so far we are hundreds of points of Alpha in the whole. Stock Number 3 is Ellie Mae. Ticker symbol? Well, this is a past Ticker symbol. It doesn't exist anymore, but Ticker symbol ELLI. Ellie Mae was a Software's a service company, providing platforms that process and manage mortgage applications. They were doing that for the lenders, for the brokers out there. It had a roughly quarter of the US mortgage market using its system, making it a quiet but critical infrastructure provider. The business operated behind the scenes. Not a brand most people would recognize at all, but certainly essential within the mortgage industry. I'm going to say a sentence as to why I like it, but the reality is, I picked this stock because my pal, Rick Munarriz was the one who taken a shine to it and brought it to Motley Fool Rule Breakers. I'll just say, Rick, I liked Ellie Mae as a pick and shovel software company selling essential tools to an enduring industry. Rather than betting on the housing cycle itself. What else do you want to reflect on about Ellie Mae, a company that is no longer traded?

Rick Munarriz: I know this story has a bittersweet ending. We'll be getting to shortly. But I know we initially found this stock in one of my favorite places, and I think it's one of your favorite places, too, find an industry that's ripe for disruption and find the company shaking things up. Ellie Mae love it. Beyond this beautiful southern bell of a name it has was breathing new life into this dodgy industry of mortgage financing. Its cloud based software platform was used by a growing number of mortgage financing professionals with every passing year, and it had a very a lot of potential before its early.

David Gardner: Really well said, and it was an early exit. Let's go to the numbers now for Ellie Mae. Our cost basis was $59.78. I'm happy to say it was even better than that for rule Breaker members. Of course, all of my five stock samplers were picking stocks we'd already picked in Motley Fool services, and some of them were up, some were down. But this one was always a good performer, Rick. It had about three years to perform. We couldn't have known back then when we picked it on February 10, 2016 on this podcast, but it went from $59.78. Well, round that to 60. It got bought out on April 17, 2019. At 99. The stock was up 65%. Now, we're only going to market against the market for the time that it was trading. Over those three years, the market was up 56%, pretty strong market over those three years. Ellie Mae beat the market. It beat the market by nine percentage points, 65 to 56. Rick, you called it bittersweet. Makes sense to me. What happened?

Rick Munarriz: We're here talking, it's like her tenure high school reunion, but Ellie Mae is like that yearbook page where someone didn't show up for the class photo, so you have just their name and nothing else. We don't know what would have been. But I think what made this not just the fact that you're buying this disruptive growth company, and it gets taken away from you is that we visibly saw this time what we missed out on. In this case, so private equity firm Thoma Bravo paid $3.7 billion for it in 2019, which you were talking about. That was the $99 buyout offer. Just a year and a half later, Bravo flipped it to Intercontinental Exchange for $11 billion. This is basically triple in 18 months.

David Gardner: Unbelievable. I totally did not remember that. That is a shocker.

Rick Munarriz: That's not just pocket change left on the table. That's an inheritance. I just regret that as investors in the stock as Rulebreakers subscribers at the time that may have played along and actually gotten a piece of the company, missed out on that because they gave up too soon.

David Gardner: Now, I mean, I'm not going to cry foul on this one. Presumably, Thoma Bravo had some value to add. That's what it's trying to do when it acquires companies and then spins them back out. But wow, a three bagger in one year, and early investors like us in Ellie Mae just did not get to benefit from that and so today it's all part of the well, the same company that owns the New York Stock Exchange, for example, Intercontinental Exchange. It's all part of that?

Rick Munarriz: Yes.

David Gardner: All right. Well, thank you for that. Unfortunately, our gains in Elli were cut short. Again, for the purposes of ten years later, this podcast in our scorecard, it gets a plus nine. Now, that's not a lot of points when we're already down hundreds of Alpha points on those first two picks of Carter's and IPG Photonics. Let's see if things can get better as we go to stock Number 4. It's Planet Fitness. Ticker symbol PLNT. Planet Fitness operates and franchises low cost fitness clubs aimed at a casual gym goer, someone like me, maybe. Rather than the hardcore athletes. Its model emphasizes simplicity, affordability, and I would say a non intimidating environment, summarized, of course, by its no lunks branding. That's what it was back then, Rick. You can tell me in a minute whether they're still going with that. Revenue was driven by recurring membership subscriptions rather than high margin premium services. I like Planet Fitness for two reasons. First, it was a disruptive subscription business. It was using low prices and mass appeal to build predictable recurring revenue at scale. The second reason I liked it is Rick Munarriz liked it, and I'm glad I have Rick back on this week, because Rick, this had been your pick for Motley Fool Rule Breakers just weeks before. I thought, Rick just picked it. I like this company, too. I'm going to add it to this sampler. Rick, how were you feeling about it back then and then today?

Rick Munarriz: I love great origin stories and Planet Fitness. In 1993, this college student by the name of Chris Rondeau gets a job at the front desk as a front desk associate at the very first Planet Fitness gym. This is when they only had, like, one or two gyms open. He's checking people in, he's working out when he's not. Twenty years later, he's CEO and 10 years after that, in 2023, which I'll get to shortly, the board asked him to step down. You mentioned about the No Logs. Yes, the new CEO, Colleen Keating, she's still going by that, changing up a few things, but still generally still believes that, hey, this is a fitness center. It is not a place just to grunt and just throw weights down on the floor heavily.

David Gardner: Well, I'm happy to say we have some better news with this dock pick. Let's review the numbers. On February 10, 2016, Planet Fitness traded at $13.86. That's how I recorded our cost basis,13 86 today $92.72 as we look at the live market numbers Tuesday afternoon, Rick, stocks up 569%. That feels a lot better than any of the previous three to me. Of course, again, the market up 274%. We're going to give ourselves a plus 295. Let's go back to that 25-year-old again, if you will, Rick Munarriz. Can you please explain this outcome to our smart 25-year-old in one sentence?

Rick Munarriz: I'll do it in gym terms. Reps matter. I could probably elaborate on that. I think I will in saying that this is a company that had delivered positive revenue growth, double digit revenue growth in 12 of the last 13 years. The only exception, David was 2020 and this is understandably so gyms were closed. Folks with money bought Pelotons, or personal trainers, folks like us who don't have Pelotons, or personal trainers, wear out our walking shoes or running shoes around the neighborhood during the early days of the pandemic. That pretty much worked out at that point. They eventually came back to the camaraderie, the cost effectiveness, and the network consistency of planet fitness. Trailing revenue today is roughly double what it generated in 2019, the year before the COVID shutdown. The stock took a 20% hit the day that the board cut ties with Ron Dou in 2023, and it seemed risky to replace them with Colleen Keating, whose previous leadership experience was in the hospitality and real estate industry. But when you think about it, it's a lot like that where you're dealing with a service industry. It is about keeping the franchisees happy, which is basically Planet Fitness is largely owned, operated by franchisees, and the company's working in a great way. It's 20.8 million members on Planet Fitness with 2,896 clubs right now. Still growing strong. Now it's $15 to start instead of $10, like the old days back when it was recommended. But I think well earned for a company to be able to say, Hey, I can go out and get my workout at a place and I don't need to buy a Peloton or a big treadmill or a nordictrack for my home.

David Gardner: Remarkable to reflect some on the volatility, not just for the stock, but that this business has faced. Of course, the entire world faced that volatility in 2020, but amazing to think, Rick, back when you had just picked this stock in January of 2016, you and I could never have dreamed five years later, the whole business would be shut down. Then to think that five years after that, it's a six bagger, and rocking the market is just astonishing. Also, that 20% drop when the founder is let go is also another example of volatility. Those kinds of headlines that people usually don't want to have to read about their stocks or their companies. But buying and holding, playing the long game, maybe I'm foreshadowing a couple of our lessons we'll present at the end, certainly has worked out well for planet fitness. I'm happy to say, Rick, I'm still not a lunk. I wish I might one day be, but I will never be.

Rick Munarriz: I'm five cans short of a six pack, so I may even be six short, and that's fine. I'm happy with me.

David Gardner: Well said. That's our first winner from this basket. Let's now move on to the final stock, stock Number 5. But before we do, I do want to underline that number. The performance, the return of Planet Fitness plus 569% overall. That number is going to come back in just a little bit. Stock Number 5 is MercadoLibre. Mercado Libre is the leading e-commerce platform in Latin America, combining marketplace listings with payments through its Mercado Pago business and logistics, it functions as what I might call a regional analog to Amazon and eBay. But adapted for local markets across South and Central America. Despite operating in what I think we can safely call politically complex countries, Rick, it had established a dominant competitive position, not just back in 2016, but years before that, Motley Fool Rule Breakers, many listeners, I suspect, have a very low cost basis in Mercado Libre. Why did I like it? Well, I like Mercado Libre because it's I think I was emphasizing this at the time. Is replacement cost was enormous. By that, I mean, its scale, its infrastructure, its regional dominance would be extraordinarily difficult, I was saying back then, 10 years ago, for any competitor to recreate. Create. Sometimes if you imagine how fungible is something or not. Not just a product or technology, but how about an entire company and what it's done on this Earth. The replacement cost I was saying is huge and getting bigger. Rick, any initial reactions to Mercado Libre either back then or now? I want to know. As a native speaker of the Spanish language, would you please open up by rocking the company name in your best Cuban/Puerto Rican accent?

Rick Munarriz: Mercado Libre free market for those who want a quick translation of it. That's how it's pronounced. Again, every country will give you a different dialects, so there is no correct way. That is the way us Cuban Americans would pronounce it. Mercado Libre.

David Gardner: Thank you.

Rick Munarriz: I think a lot of us are introduced. It's even as growth investors coming out of the dup pub in 2001. This was 25 years ago. eBay made an investment in Mercado Libre for 20% of the company. That helped finance Mercado Libre's push into the PayPal ask Mercado Pago platform way back then. eBay would eventually fully divest of the investment by 2016 along the way, but 2016 completely out of it Mercado Libre has a market cap of $100 billion. Roughly today, eBay is a $40 billion company. Can you imagine how much better eBay shareholders would be if they still owned $20 billion of Mercado Libre stock right now?

David Gardner: Incredible. Well, let's check the numbers then, Mercado Libre 10 years ago today was at $87.71. Today, it's at $2,041 and a half and $0.50. This has been a spectacular performer. It's up 2227.6%. That's 23 times in value. The market again, up 274%. I'm really happy to say that this fifth stock in this five stock sampler has beaten the market by plus 1953 points, which means when I do the final accounting it's going to be positive coming back in a couple of minutes. But first, Rick what do you think we can learn from Mercado Libre? I'm going to say in two regards. First of all, just any additional business thought from you, that's remarkable to think about that growth that eBay missed, even though it helped fuel and to see Mercado Libre today slightly over $100 billion market cap makes me smile. Anything else we can learn from the business, but also just for investors everywhere. What's an investment lesson we can pull from this one?

Rick Munarriz: Growth compounding at a heavy pace is a monster force of wealth creation. In the last 10 years, Mercado Libre's revenue has soared 40 fold, and despite expanding to a lot of lower margin fintech specialties and making big investments, operating profit and net income have roughly grown 20 fold in those 10 years. This is a growth story that was hiding in plain sight. As anyone that has visited the Mercado Libre's Investor Relations site, and I have several times over the past two decades there's a section right up the landing page that spells out five charts of how far Latin America has to go to catch up to the US and other markets. Take the shift of offline retail going online. In the US, 30% of US retail is now coming online. Closer to 40% in China, believe it or not. In Latin America, it's just 15%. In the US, two thirds of us have credit card, 95% of us have a bank account. In Mexico, it's just 11% have a credit card and less than half, or 49% have a bank account. Digital online advertising which is a big part of the business, now that McGiv is so wide and has ability to sell online advertising on his platforms, just 10% of total Latin American advertising market is being spent on online and digital ads. All these things that should grow. We've known this all along, so the catalyst and the growth thesis was there for everyone to see. It was just missed by so many investors.

David Gardner: We've known this all along. I really appreciate that point. This is not just I told you so from listeners of this podcast 10 years ago or users of our Motley Fool Rule Breaker service which has a much lower cost basis than that. This is just something that we all can have observed, the great growth, the top line growth in this case of e-commerce and finding companies that we're helping drive that. That had ownership of that growth in geographic areas of the world, it has been just an object lesson in how to find a huge grower and buy to hold. Rick, this stock has been volatile over the years. It's not unusual to see over any three or five year period Mercado Libre get cut in half at some point and that continues into the present day. This has been a volatile stock just the last couple of years and yet what a monster. Especially for this five stock sampler, what a hero. For fans of this series, you might recognize something from this week. Twenty weeks ago when we reviewed the first one which is five stocks for the next five years, we had a similar dynamic. We had one stock that pulled all the others up. In venture capital, they call this the power law because consistently in venture capital I would say the same of rule breaker investing, it's just a few companies that tend to win and pull all of a VC's returns up into market beating status. You don't unfortunately win across your portfolios often as a venture capital investor and I would say the same as a rule breaker investor.

The power law was demonstrated 20 weeks ago when we looked over five stocks for the next five years, and what was the stock? What was the stock that gave us multiple hundred point winners against the market? The answer is Mercado Libre, the exact same stock that you saw win for this sampler. I think there's a very important lesson there as well for rule breaker investors and that is adding to great stocks. You don't always have to be on the lookout for some new thing to add to your portfolio. We've done really well. I said it earlier, add to your winning investments as a rule breaker investor. It's a great habit to get into. I certainly didn't pick Mercado Libre for every one of these samplers. I maybe did it one or two more times, but I'm sure glad I did it this time and two times ago as well. You can see the power of adding to your winners and growing conviction in companies that you get to know better as time passes for you as a shareholder. Well there they are Carter's, IPG Photonics, Ellie Mae, Planet Fitness, and Mercado Libre. I can't pronounce it as well as Rick. Five stocks to feed the beer 10 years later and here are the numbers overall for this five stock sampler. I already mentioned the stock markets return as measured by the SPY, the exchange traded fund, the ETF that marks against the S&P 500.

Again, 274.3% and that's not actually the case for all five of these stocks. Because Ellie Mae averages in only a 56.2% gain, because it only lasted for three years. When you blend all that together, you actually get a market return of 230.7% and these five stocks, taken together their average return, 568.5% which is 330 plus percentage points on average ahead of the market. I mentioned earlier, Rick hold on to that number 569 because that represents two things right here. First of all, that is the exact return of planet fitness. It was up 569% and in fact, the average of these five stocks taken together, 568.5 or round it 569. We have Planet Fitness which is dead on the average, the winning average of these stocks. We have three stocks way below it including Carter's which is in fact, cut in half over these 10 years. Then we have one stock reigning supreme pulling all the others up with it to achieve that remarkable average 10 year return of 568.5%. Enough with the numbers and for those not numbers inclined, we're done with the numbers. Although that's a key part of 10 years later and indeed a key part of investing. Rick, let me turn back to you now. We've just gone over five individual stocks. We've talked about them as a basket, and I think we owe our listeners one or two lessons that you can pull out of what we've just talked about that we can all use going forward as investors.

Rick Munarriz: The quick lesson is a 23 bagger will help erase a lot of mistakes, so keep swinging for the fences. But more to the point, I think some of the lessons here, you mentioned the volatility in Mercado Libre. Flynn Fitness, they just changed their CEO. They just let him go and that hits the stock. These two stocks still easily beat the market. It's important every investor should have a Zoom out button, just built in as a default macro or just back out, see how things are going in the longer term, because that is very important as an investor to deal with the volatility because it will happen. Sometimes volatility happens for a reason. In a case like Mikvia, it's usually a case of well, hey, one report wasn't too good. Or hey, there's a situation happening in Argentina, or Brazil, or what's happening now in Venezuela. There's always going to be something happening percolating in Latin America. That's never going to stop. It's just a matter of growing through it and over time offsetting further misses just as you would in a five stock sampler.

David Gardner: Thank you for that, Rick. Thank you for both of those lessons and you're right. A 23 bagger will erase all mistakes which is such a key rule breaker investing point one that we've made over and over, not just on this podcast, but demonstrating it through numbers like the ones just shared over the years for our members. As a rule breaker investor, you are so advantaged if you can learn to hold on to great companies. Mercado Libre really has been a great company for 20 plus years now ever since it was founded by a Stanford MBA. He was getting his MBA at the time, Marcos Galperin who has to be one of the lesser known, greater CEOs of our time. A remarkable story. Before I let you go, Rick I have to ask you two more questions. The first is out of these five stocks, are there any that you particularly favor or disfavor over let's say, the next 10 years? Then you also have to reflect briefly as somebody who admittedly of Cuban origin, but I know you moved back at an early age to Puerto Rico as a kid reflecting on Bad Bunny's halftime show. In that order, Rick stocks that you favor Bad Bunny.

Rick Munarriz: Yes, so I will BlueSky this on both fronts. First of all, Marcos Galperin easy choice. I want to talk about Flynn Fitness, because I know it's not going to get a lot of talk in your RBI podcast. This is a company that not only has defied everything that's happening. It's the company where in a time like now where you're seeing this investment Carter where AI is a powerful tool and it's going to be amazing, and it's already using amazing applications. But with investors worried about, will AI hurt this industry, hurt that industry? You can AI a workout. You can AI out anything, a fitness regimen. But you're not going to be able to construct a nordic track or any a treadmill, or weights, or anything. This is just a $15 a month expenditure. You pay a little more if you want access to all clubs and a lot of other perks, but a great product that I think will continue to hold up well over time. That's the one stock. The Bad Bunny concert. Again, so I was born in New Jersey. My parents were Cuban American. I lived in Puerto Rico. I have about a third of my family is down in Puerto Rico, because they enjoy living there so much. Bad Bunny, I understood about 80% of what he says, because even though I'm very Guano and Briqua so I'm fully fluent. He goes so fast, even I can't catch up. I thought the showmanship was spectacular. I'm upset that it became a political thing. Obviously, if Bad Bunny isn't your cup of tea, I respect that. I respect your right to turn the TV off. That is what this country's about. I thought it was a spectacular show and I'm a fan. I've become a fan of his music, not of all his actions, but of his music.

David Gardner: Well, thank you very much, Rick Munarriz. Thank you, especially for being with me once again. What a delight it is. First of all, 20 plus years working together is its own joy, but it's also just great to have you back on rule breaker investing, 20 weeks after you opened up this series. Let's do it again sometime soon. Maybe in 10 weeks or so, Rick. But thank you for your analysis of these five companies, and thank you for picking a couple of these companies. Both of them beat the market, especially one of them is I'm not going to say the energizer bunny or the bad bunny. I'm just going to say it's the one that keeps on going of the two Planet Fitness.

Rick Munarriz:: Yes. It's a hair above the rest, HRE.

David Gardner: The guy leaves with a pun as he walks out the door. Rick is an improvisational comedian among other things, operating out of just the funny in Miami, Florida. Cheers to you, Rick. I think I'm going to add in my plaudits, my belief in Mercado Libre and stock I continue to own. Very happily so, the company is now capitalized at a $100 billion market cap, not quite the same company as when it was at a $1 billion market cap. Yet, beautifully positioned, I think to continue adding value to the world going forward. As I've often said, add up, don't double down. That is the second habit of the rule breaker investor. Boy, if we have ever been right to just continue adding to and holding this stock over time. As I think about these five, that's the one I would have my money in as well. That's10 years later, five stocks to feed the bear the third of 35 stock samplers. Over the next 270 weeks, every 10 weeks we'll be bringing you the next sampler. I'm sad to say they're not all this great, but 10 weeks from today we'll be back with five winners in a thinking world that'll be in early May. In the meantime, hope you had fun. Hope you learned a few things this week. Fool on.

David Gardner has positions in Amazon, Apple, Duolingo, Etsy, IPG Photonics, MercadoLibre, and Walt Disney. Rick Munarriz has positions in Apple, Duolingo, and Walt Disney. The Motley Fool has positions in and recommends Amazon, Apple, Duolingo, Etsy, MercadoLibre, Planet Fitness, Walt Disney, and eBay. The Motley Fool recommends Carter's and IPG Photonics. The Motley Fool has a disclosure policy.