- About GorillaTrades and The Motley Fool Stock Advisor
- GorillaTrades vs. The Motley Fool Stock Advisor: Investing Style
- GorillaTrades vs. Stock Advisor: Pick Format and Frequency
- GorillaTrades vs. Stock Advisor: Historical Performance
- Pricing Comparison
- Which Service is Better?
- Alternatives to GorillaTrades and The Motley Fool Stock Advisor
When it comes to choosing a stock picking service, you have a decision to make. On the one hand, there are stock picking services aimed at long-term investors. On the other, there are services that rely on technical signals to recommend short-term positions that turn over every few weeks or months.
GorillaTrades and The Motley Fool Stock Advisor are two of the top stock picking services in each of these categories. GorillaTrades is ideal for active traders who want to take advantage of technical price movements, while Stock Advisor is best for passive investors who want to build a long-term portfolio. Let’s take a look at how these two services stack up to help you decide which is right for you.
About GorillaTrades and The Motley Fool Stock Advisor
GorillaTrades was founded in 1999 by Ken Berman, who was at the time a stockbroker on Wall Street. Berman timed the launch of GorillaTrades with the growth of online brokerages, and gained a following among investors who wanted to take advantage of accessible stock trading. GorillaTrades focuses on technical signals to identify stocks that are poised for short-term gains.
The Motley Fool Stock Advisor was launched in 2002 by brothers Tom and David Gardner. This newsletter is released once each month and includes two highly researched stock picks. Stock Advisor focuses on stocks that are poised for long-term, explosive growth.
GorillaTrades vs. The Motley Fool Stock Advisor: Investing Style
GorillaTrades and The Motley Fool Stock Advisor approach stock investing in fundamentally different ways.
GorillaTrades is an active investing service based on technical signals. The service looks across all market sectors to find technical price patterns, such as ascending triangle patterns, that signal a coming breakout. Picks are put on subscriber’s radar at the end of the trading day, and then triggered when the stock reaches a specific price. GorillaTrades doesn’t consider fundamentals at all, and positions are typically open for a few weeks to a few months.
Stock Advisor is a fundamental investing service that largely ignores technical analysis. Instead, Stock Advisor picks are based on the stocks’ ability to grow over the long term. This service doesn’t use traditional fundamental analysis in many cases, however. Instead, it looks for factors that set companies apart, such as visionary leadership or new technology. Many Stock Advisor picks are companies in new industries that have not yet matured, although there are also well-established giants that the service’s analysts believe are undervalued. Stock Advisor positions are typically open for at least a year, and many are open for more than three years.
GorillaTrades vs. Stock Advisor: Pick Format and Frequency
Given the differences in investing philosophies, it should come as little surprise that GorillaTrades and Stock Advisor offer their picks in very different ways.
Stock Advisor’s system is relatively simple and hands-off. Subscribers receive an email newsletter once per month that contains two new stock picks. There’s a detailed explanation of why those two stocks were chosen, but all you need to do is invest in them during the next trading day. Picks are only occasionally removed from the Stock Advisor portfolio, and there are updates about what positions to close in each monthly newsletter.
It’s also worth noting that Stock Advisor offers a list of picks that it calls “Starter Stocks.” This list includes stocks that the Gardner brothers believe every investor should have in their portfolio. If you’re just starting out building an investment portfolio, this list can be extremely helpful.
GorillaTrades sends emails once per day after market close with one new stock pick and an update on the current portfolio. Each stock pick is accompanied by an annotated chart that highlights the trigger price, a stop loss price, two price targets, and a confirmation volume. Stocks are said to trigger as soon as they reach their trigger price, but the position isn’t “confirmed” unless the move is accompanied by a surge in trading volume. You can opt to receive text message alerts from GorillaTrades so that you are notified whenever a new stock pick triggers or an existing stock in the portfolio stops out.
The GorillaTrades system also involves scaling out of positions by selling 75% of your shares at the first target price (usually 7-10% above the trigger price) and the remaining 25% at the second target price (often 15%-25% above the trigger price). Staying on top of this requires you to pay attention, as the second target price can be raised for high-performing stocks. The stop loss price for every pick is also raised in accordance with its performance to lock in profits.
GorillaTrades vs. Stock Advisor: Historical Performance
It’s difficult to directly compare the historical performances of GorillaTrades and The Motley Fool Stock Advisor because they utilize such different trading systems. Moreover, GorillaTrades does not tabulate its performance since inception.
Stock Advisor has arguable been one of the most successful stock picking services on the market. Since its launch in 2002, the service has generated returns of 504% compared to 95% for the S&P 500. Some of its top picks include Amazon (+19,731%), Disney (+6,611%), and Netflix (+20,293%).
GorillaTrades doesn’t publicize its long-term performance. However, at the time of writing, the portfolio held 31 stocks with an unrealized gain of 279% (not accounting for the fact that 75% of shares were sold for stocks that already achieved their first target price).
GorillaTrades costs $495 per year, while Stock Advisor costs $99 per year. That’s a big difference that partially reflects the fact that GorillaTrades is a more involved service that includes daily stock picks. Still, Stock Advisor is surprisingly inexpensive given the strong long-term performance of its picks.
Which Service is Better?
Whether GorillaTrades or The Motley Fool Stock Advisor is better for you depends on your investing style and goals. GorillaTrades is an active stock trading service that requires daily attention and the ability to act on triggers throughout the trading day. While it doesn’t take a lot of time each day, it may be too involved for investors with demanding day jobs. There is also considerably more risk in short-term trading, even if GorillaTrades manages this to some extent with stop loss recommendations.
Stock Advisor is the better choice for most long-term investors, and it is especially suitable if you want to take a more hands-off approach to investing. There are only two stock picks per month and no entry or exit points to worry about. It’s also a such a low-cost service that it is worth using to craft a long-term portfolio even if you also use a service like GorillaTrades for active trading.
Alternatives to GorillaTrades and The Motley Fool Stock Advisor
If neither GorillaTrades nor The Motley Fool Stock Advisor fits your investing style, consider an alternative like Zacks Premium. Zacks Premium is a top stock picking service that offers a mix of technical and fundamental analysis. While we prefer both GorillaTrades and The Motley Fool Stock Advisor to Zacks Premium, Zacks does have some unique tools for self-directed research.
Zacks analysts grade hundreds of stocks based on their value, growth, and momentum, and offer a list of dozens of #1-rated stocks that they think are worth investing in. What’s especially nice about this service is that you have access to market-wide research, so you’re free to make your own investing decisions rather than have picks handed down to you. Zacks Premium costs $249 per year, which is more than Stock Advisor but much less than GorillaTrades.
GorillaTrades and Stock Advisor are both stock picking services, but they’re designed with two completely different investing styles in mind. GorillaTrades is best suited for active investors who want to take advantage of technical price movements over short timescales. Stock Advisor is designed for long-term investors who want to outperform the stock market over a decade or more. If you can afford it, using both of these services in conjunction can be a very effective way to beat the market in the short-term while building a high-growth portfolio for the long-term.