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This article was last updated on 11/13/2021.
The Motley Fool and 7investing both offer popular investment newsletters that aim to beat the market. In this review of the Motley Fool vs. 7investing, we will look at the pros and cons of each service. On the Motley Fool side, we will look at Stock Advisor and Rule Breakers and see how they compare to 7investing. We will compare the performance of the newsletters, the quality of the stock reports, and the overall value of each service. (Click here to read our review of Stock Advisor and click here for our review of 7investing.)
The opinions in this review are our own based on our personal experience with these services. We do not let advertisers influence our content. This content has not been provided by or endorsed by any advertiser. To support our work, some of the links in this article might be from our sponsors.
Motley Fool vs. 7investing: Quick Summary
- Stock Advisor, Rule Breakers, and 7investing are popular investment newsletters that have been beating the S&P 500.
- The Motley Fools has dozens of investment newsletter offerings. They range in price from $199 to $13,999 per year. Each newsletter focuses on a specific industry, market cap, or investment strategy. They come with different risk levels and potential returns. Some of their newsletters require a minimum investment of $50,000 to $100,000+ just to offset the cost of the service. Obviously, this won’t be an issue for all investors but some of these newsletters may not be ideal for someone just getting started.
- 7investing offers a single investment newsletter that includes their 7 highest conviction stock ideas from across all industries, market caps, and regions. Investors can pick and choose stocks from that list based on their goals and risk tolerance. Their premium service costs $49 per month or $399 per year. With its strong historical performance and educational contents, both beginner and advanced investors can benefit from this service.
- While we are fans of both companies and the services they provide, we believe 7investing offers the best overall value for reasons we discuss below. If you’re already familiar with both companies, feel free to skip to the side-by-side comparison section.
Table to contents
- Are investment newsletters even worth it?
- Motley Fool Quick Review
- 7investing Quick Review
- How much overlap is there between 7investing and the Motley Fool?
- 7investing vs. Motley Fool: Side-by-Side Comparison
- Motley Fool vs. 7investing: Conclusion
Are investment newsletters even worth it?
A good quality investment newsletter can save you hundreds of hours of research and can also supercharge your portfolio. It can help you find tomorrow’s winning companies while they’re still relatively small and unknown to the general public. It can also help you identify medium and large companies that still have a lot of room to grow. Each newsletter has its own objectives, such as generating income or outperforming the market. Many investment newsletters under-perform the market. This is especially true with market-timing newsletters.
Mark Hulbert spent 36 years tracking the performance of investment newsletters and publishing his findings in a service called Hulbert Financial Digest. His research showed that most market-timing newsletters failed to steer their members out of the market prior to a crash or back into the market at the start of a new bull market. However, some people confuse market timing with market beating strategies. Hulbert’s research has shown that buying and holding quality companies over the long run can allow one to beat the market. However, it does require “the all-too-rare discipline of holding on to recommended stocks through bear markets.”
Motley Fool Quick Review
We start this review with the Motley Fool since they are the older company. The Fool was founded in 1993 and is a widely recognized name in the investment world. They have branches in several countries, including in the UK, Germany, and Japan. The company was started by Tom and David Gardner, neither of whom has any formal education in finance (they both majored in English). They currently have more than 300 employees. The “Fools” are passionate about finding winning stocks and sharing their knowledge with the public. They do a great job at educating members on the companies they recommend.
As of January 2021, the Motley Fool website offers more than 30 different premium services. Each of them is an investment newsletter with a specific focus, such as cloud computing or marijuana stocks. They range in price from $149 to $13,999 per year1. The Fools frequently add new services and send promotional emails to their subscribers. If you’ve ever been a Motley Fool member you probably remember your inbox filling up with those emails.
Some Motley Fool services can be purchased for a low introductory price, such as $99/year for their Stock Advisor or Rule Breakers newsletters (and, yes, there are ways to sign up for even less money with special promotional links). After the trial period, the price increases significantly. Stock Advisor goes up to its regular price of $199 and Rule Breakers goes up to $299 per year.
One of the disadvantages of having so many services is that it can get really expensive to get the Fools’ top stock ideas. In other words, an entry-level service like Stock Advisor or Rule Breakers is going to offer “good” stock recommendations. In fact, many of them will beat the market. But if you want the Fool’s best stock ideas (i.e. stocks with the greatest growth potential), you’ll need to spend significantly more money. As a result, some of these newsletters are out of reach for many beginner investors.
In their promotional materials for these high-priced newsletters, the Fool often provides examples of individual stocks that performed really well. But interestingly enough, they rarely publicize the overall performance of these services 3. So you typically have to become a member to find out how well these services actually perform. Given that we have never purchased any of their “advanced” newsletters, it is hard to say if they are worth the extra money. It would be interesting to know how they compare to Stock Advisor or Rule Breaker in terms of performance. (If any of you are members of one of those services, please let us know how they compare in the comments section. We would love to find out!)
It should be mentioned that Rule Breakers has been under-performing Stock Advisor in spite of the fact that it is 50% more expensive. So a higher membership price does not necessarily translate to higher performance. Another issue that many Motley Fool members have raised over the years is that the same stocks are being recommended across multiple newsletters. Some stocks are recommended by as many as a dozen Motley Fool newsletters.
Bottom line: Stock Advisor and Rule Breakers are two entry-level investment newsletters offered by the Motley Fool. We are big fans of both. They often recommend widely-known and well-liked companies (that is especially the case with Stock Advisor). This can be a good thing, as it is easier to own companies whose products you’re familiar with, especially when the stock market experiences a lot of volatility. That is not to say that they only recommend well-known companies. There’s a good mix of businesses from various industries and many of them will be new to most investors. While both newsletters have been beating the market, if you want their “hottest” stock tips, you will need to subscribe to their more expensive newsletters. Once you sign up for any of their newsletters, you will frequently be receiving marketing emails promoting their latest-and-greatest newsletter.
7investing Quick Review
7investing is a relatively new investment newsletter. The company was started back in March of 2020 by Simon Erickson. They offer an investment newsletter for $49 a month or $399 a year, (click here to read our in-depth review of 7investing). Every month, their lead advisors publish their 7 best stock ideas. These can be selected from any industry, market cap, or country as long as they can easily be purchased by individual investors on an American exchange.
The company was founded with the goal of helping the average investor find and invest in great companies. One of the big advantages of 7investing is that they put all their focus into a single newsletter. So, as a member, you only get their highest-conviction stock ideas. That means no annoying promotional emails. And as we have discussed in our review of 7investing, the cost of the newsletter is low enough that even small sums invested in each stock will pay for the service several times over based on historical performance. Of course, you don’t have to buy all 7 stocks every month to benefit from this service. Each of their recommendations specifies an industry and a risk profile so you can select stocks that best fit your needs.
Although 7investing is a fairly new company, their lead advisors have impressive backgrounds and a history of beating the market prior to joining the company. Several of them previously worked at the Motley Fool. For example, Simon Erickson (7investing CEO) and Steve Symington spent seven years each working at the Motley Fool. (You can read our interview with Simon Erickson here.)
Each lead advisor brings a unique set of skills and expertise. Maxx Chatsko focuses on biotech and gene-editing companies. Daniel Kline focuses on retail, technology, and entertainment, among other industries. Matthew Cochrane is a detective at a Florida police department with a passion for investing. This set of diverse backgrounds allows 7investing to analyze and recommend stocks from various industries.
One of the things we love about 7investing is the level of transparency when it comes to their process of identifying winning stocks. Each month, 7investing publishes videos showing each lead advisor pitch a stock to their team. They have to explain why they believe that the stock will outperform and then defend their investment thesis when challenged or questioned by other lead advisors. This process allows them to view their stock idea through a different lens. And if their team pokes enough holes in their investment thesis, they might decide to come up with another stock to recommend.
The quality of their monthly stock reports is top notch. It’s all meat and no potatoes. Their reports are detailed, well-written and take about 7 to 10 minutes each to read. Each report includes a “Deep Dive” video in which each advisor presents their stock idea to the other advisors. Then they discuss or ask questions about the company. It is not unusual for an advisor to raise critical questions or even present the “bear case” of the company in question. This gives members the information they need to make an informed decision. Below is a publicly available mock Deep Dive video to give you an idea of the format. 7investing also produces a large amount of free and premium video and audio content along with transcripts so you can consume their information in whatever format works best for you.
Finally, one of the things that really sets 7investing apart is their level of engagement with their members. If you have a question about anything related to stocks, you can ask about it on one of the many live videos they produce. You can also email them and message them via Twitter and they tend to respond very quickly (often within hours). Their responses are personalized, well thought-out, and you can tell that they are passionate about helping their members. The education you get from 7investing is worth the price of the membership on its own.
Bottom line: 7investing selects stocks from various industries and market caps and then publishes reports with their best stock ideas. In its first year in business, 7investing stock picks are already showing an impressive performance (see chart below). We love the fact that they only recommend their highest conviction stocks without any upselling. The membership is affordable enough to allow anyone to get started with small amounts of money. If we had to pick a single service out of the three reviewed in this article, 7investing would be it.
How much overlap is there between 7investing and the Motley Fool?
Back in June, we got a question from one of our readers about how much overlap there is between the Motley Fool and 7investing. So we crunched the numbers and were pleasantly surprised by the results. Out of 244 unique & active recommendations between 7investing and Stock Advisor, only 15 stocks (or 6.1%) are recommended by both services. As for Rule Breakers and 7investing, we only found 20 matches out of 204 unique & active recommendations (9.8%)5.
Stock Advisor tends to recommend larger, more established companies, while Rule Breakers tends to recommend slightly smaller companies. While 7investing recommends companies of all size, they often recommend smaller companies that are earlier in their growth journey and have greater growth potential. In fact, they recommend small and micro cap stocks almost every month. Motley Fool tends to reserve their micro cap stocks for their more expensive services, such as their recently released “Everlasting: Firecrackers” service.
Motley Fool vs. 7investing: Side-by-Side Comparison
The chart below looks at the three newsletters side-by-side:
|Stock Advisor||Rule Breakers||7investing|
|Number of new monthly stock recommendations:||2||2||7|
|Monthly stock re-recommendations:||10||10||7|
|Performance (March 2020 through March 2021) 2||26.36%||18.80%||40.84%|
|Is content available in various forms (videos, articles, podcasts, etc.)?||Yes||Yes||Yes|
|Volume of promotional emails sent to members:||High||High||None|
|Does it provide updates on past recommendations?||Yes||Yes||Yes|
|Does it beat the market?||Yes||Yes||Yes|
|Does it promote long-term investing?||Yes||Yes||Yes|
|Does it recommend small cap stocks?||Rarely||Sometimes||Often|
|Does it pick stocks from across many industries?||Yes||Yes||Yes|
|Is there a chat board for members?||Yes||Yes||No|
|Amount of content available to members:||High||High||High|
Number of new stock recommendations each month
This metric only takes into account new recommendations, as those are the only stocks tracked in their respective scorecards. In addition to the 2 official monthly recommendations, Stock Advisor and Rule Breakers also publish a list of 5 “Best Buy Now” stocks twice a month. These are typically short reports listing previously recommended stocks that the Fool believes present “timely buying opportunities”.
As for 7investing, their team of advisors votes on their favorite recommendation from the previous month. They take a weighted-average and the stock with the highest score becomes their Best Buy. When they have 7 advisors on the team, the Best Buy is disclosed to subscribers on their monthly team call. If they have 6 advisors on the team (as they did for much of 2020), their Best Buy gets added as a second position on the scorecard and in their real-money portfolio. It should be noted that 7investing considers all their stock recommendations to be evergreen “buys” indefinitely (unless something really bad occurs at one of the companies, at which point they would issue a “sell” recommendation).
Bottom line: Stock Advisor and Rule Breakers each publish 2 new stock recommendations and 10 “Best Buy Now” re-recommendations each month. 7investing publishes 7 new stock recommendations and 1 “Best Buy” re-recommendation every month.
The Motley Fool will sometimes offer a low introductory rate on their Stock Advisor and Rule Breaker services, however, once the discounted period ends the service will auto-renew at the full price. While both services offer interesting (and often profitable) stock recommendations, you will need to upgrade to one of the Fool’s more expensive services to get their stock picks with “maximum upside” potential. These services typically cost well over $1,000 per year.
7investing chose to come up with a simple pricing structure: $49 per month or $399 per year. In our opinion, a 7investing membership is well worth $49 a month. When you take into consideration the quality and depth of their reports and the fact that they have a single newsletter, the higher price of their membership makes more sense. To put the price in perspective, at $399 per year and with seven full-time analysts, you are paying each analyst the equivalent of under 3 cents per hour for their research!4
And you can try it for just $39 by using promo code “inveduco”. This gives you full access to all their recommendations, as well as their premium articles and videos. The thing we like about 7investing is that they only have one newsletter with their 7 highest-conviction stock ideas each month. As a subscriber, you are never asked to upgrade to other newsletters, as you are already getting their best content.
Bottom line: 7investing currently costs $49/month or $399/year (you can try the service for $39 for the first month by using promo code “inveduco”) and they provide their best stock ideas from across all industries, market caps, and countries. Stock Advisor costs $199/year, although new customers can try the service for $99 for the first year. Rule Breakers costs $299/year (new customers can try it for $99 for the first year). Stock Advisor and Rule Breakers are both entry-level services. The Motley Fool reserves their best stock ideas for their higher-end services. Although 7investing has increased their prices in July 2021, when you compare them to the Motley Fool’s premium newsletters, 7investing remains significantly less expensive.
Stock Advisor was started in 2002 and Rule Breakers in 2004. Given that 7investing wasn’t started until 2020, the only fair way to compare performance is by looking at the same time period. So in the chart below, we are comparing the performance of these services from March 1st, 2020 through May 29th, 2021. Stock Advisor currently has the highest performance within this timeframe.
This is an area where 7investing shines. Once you become a member, you get access to all the content they have to offer. Their goal is help the average investor succeed. The emails you get from them offer valuable content, such as notifications about new stock recommendations, company updates, or information about upcoming members-only calls. You never get marketing emails from them.
When you sign up for Stock Advisor or Rule Breakers you quickly discover that they send weekly -often daily- marketing emails. Unfortunately, these emails offer relatively little value and usually promote their latest-and-greatest newsletter. Once in a while, you’ll get an email with valuable content, such as a special report with stock recommendations, but most are promotional emails. Obviously, this method must be somewhat effective since they have been doing this for years. But it makes for a frustrating experience for members and limits their access to stock information based on what they can afford.
Bottom line: Everyone hates marketing emails. Sadly, the Motley Fool sends quite a few of them (something members often complain about). Overall, they offer great content but they reserve their top stock picks for their highest-paying members. 7investing offers their best stock ideas to their members at an affordable price. We have not received any promotional emails from them to date.
Motley Fool vs. 7investing: Conclusion
We really like both companies and picking a favorite was not easy. 7investing, Stock Advisor and Rule Breakers all provide a great list of stock recommendations. We own stocks recommended by all three services and have earned very nice returns from these investments. Not all stocks have been winners (which was to be expected) but overall, they are beating the S&P 500 by a nice margin.
All three services promote long-term investing, which is great. We believe that no matter which service you pick, you will likely do well if you invest over a long period of time. However, if we had to pick one of those services, it would be 7investing. Every month, each advisor is asked: “What’s your very best idea right now?” That becomes their primary focus for the month. We are big fans of this strategy. Ultimately, we picked 7investing for 4 primary reasons:
- The fact that they put all their efforts into a single newsletter.
- The high performance of their stock picks.
- The affordable price of the service.
- Excellent customer service and high level of interaction with their members.
If we had to pick a second favorite newsletter out of the three -and this would not be an easy choice since they are all great- it would probably have to be Stock Advisor. Even though David Gardner’s picks in Stock Advisor have performed better than Tom’s, it seems like Rule Breakers (which focuses on David’s picks) has been under-performing Stock Advisor over both a short period (such as the past 14 months) and since inception. We are big fans of David Gardner. But when you add the higher cost of Rule Breakers and the underperformance when compared to Stock Advisor, it seems difficult to justify the extra $100 per year.
Let us know in the comments if you have signed up for any of these services. We would love to hear about your experience!
- As of January, 2021
- As of March 31st, 2021. 7investing started in March 2020, so we used that as the starting date for all three services to have a fair side-by-side comparison over the same time frame. We will periodically update this number.
- When looking at https://www.fool.com/services/, the only services that list an overall performance are Stock Advisor and Rule Breakers (as of 2/13/21).
- This assumes that each analyst works 40 hours per week and takes 2 weeks of paid time off per year.
- As of June 28th, 2021. We will periodically update these numbers.