Defense · Report Line
On Dec. 4, 2024, The Trade Desk (TTD) closed at $141.53. Our initial Rule Breakers recommendation from February 2017, priced at $3.43 per share (split-adjusted), had surged over 40 times. By August 18 of this year, we issued a sell alert at $13.42, with the position barely recovering to less than fourfold growth.
Meanwhile, Arista Networks (ANET), which lagged The Trade Desk for a decade, had also more than quadrupled in value. The Motley Fool’s approach emphasizes fairness: every stock starts at the same size, capped at 5%, ensuring a level playing field. This principle mirrors the Kentucky Derby’s setup—20 horses, 20 stalls, all equidistant from the finish line.
Investors recognize favorites and long shots, but the gate ensures honesty about uncertainty. Some favorites falter, while dark horses thrive. The Trade Desk’s pitch was strong for a decade, serving independent advertisers who avoided Alphabet (GOOG, GOOGL) and Meta Platforms (META).
However, Amazon’s entry with lower fees disrupted the market, causing growth to plummet from 22% to 3% within 15 months. The company’s restructuring—cutting 15% of staff without quantifiable savings—was criticized for downsides without upside. Meanwhile, Arista Networks, initially recommended in 2014 and again in 2022, surged over 40-fold, outperforming The Trade Desk’s gains.
Dark horses like Advanced Micro Devices (AMD) and Broadcom (AVGO) also delivered strong returns, with AMD up nearly sevenfold after Xilinx acquisition in 2022 and Broadcom’s AI-driven growth exceeding initial expectations. The Motley Fool’s strategy, ‘Losing to Win,’ advocates for a fair start and adaptability: back thoroughbreds and retire also-rans. The Trade Desk’s restructuring alert preceded its decline, illustrating the need for flexibility in portfolio management.
Source: The Motley Fool
