A Lottery Jackpot You Can Win

OK, OK ... I can't blame you for wanting to win the lottery. After all, who couldn't think of something to do with, say, a big $20 million payout? All you have to do is "invest" a dollar. It's almost a compelling thing to do.

Of course, few people call lottery-ticket purchases "investments," and there's a good reason for that: It's gambling, not investing. It's speculation of the most hopeless kind. The odds of winning the Powerball Grand Prize are 1 in 195 million! Let that sink in. Do you know how big a number that is? Well, 195 million years ago, Stegosaurus dinosaurs roamed the earth, during the Jurassic period. The population of Brazil is only slightly north of 195 million -- and Brazil is the most populous nation in South America. Heck, even the lottery odds of winning just a comparatively measly $100 are more than 10,000 to 1.

Some more perspective

• The odds of becoming president of the United States: 1 in 10 million
• The odds of being killed by lightning: 1 in 2.7 million
• The odds of winning an Academy Award: 1 in 11,500

Now take a minute and ask yourself how likely you think you are to die by a lightning strike. Do you expect to become president? Are you bucking for an Academy Award? If those things seem very improbable to you, just think about how improbable winning the lottery is.

Good news: You can win another lottery!
Fortunately, if you'd love to see a modest investment of yours swell into something huge, you don't have to hope for something almost hopeless, like a lottery jackpot. There are other jackpots you can chase instead.

Consider, for instance, Rule Breaking investing, a strategy developed by Fool co-founder David Gardner, which seeks out companies that offer "The Highest Possible Returns. Period." He looks for companies that are breaking the rules of the status quo, ones that offer new and better ways of doing things. Think, for example, of how eBay (NASDAQ:EBAY) and Amazon.com (NASDAQ:AMZN) have revolutionized the way many of us shop. Think of how Southwest Airlines became one of the few profitable airlines by developing new ways of doing things, such as just flying one kind of airplane. Even Wal-Mart (NYSE:WMT) was a Rule Breaker once, in daring to build big discount stores in remote, often rural locations.

These companies are the ones you end up wishing you'd bought 20 years ago, and the ones that can turn thousands into millions.

To find stocks like these, David looks for companies that share these six traits:

1. Top dog and first mover in an important, emerging industry.
2. Sustainable advantage gained through business momentum, patent protection, visionary leadership, or inept competitors.
3. Strong past price appreciation that can make other investors too afraid to buy a stock they think might be overvalued.
4. Good management and smart backing.
5. Strong consumer appeal.
6. Documented evidence that it is overvalued according to the financial media.

David has been putting his system to work in our Motley Fool Rule Breakers newsletter, where his picks have been beating the market handily, overall, since 2004. Of course, not all of his picks are winners. That would be the case with just about any set of recommendations -- but Rule Breaker companies can be extra volatile sometimes. That's why some of the newsletter's picks have fallen by more than 50%. And that's why you'd never want to put all of your money on a Rule Breaker stock -- although even that imprudent move is still less crazy than spending a lot of money on lottery tickets.

However, on the whole, official Rule Breaker recommendations have been outperforming the market by more than 18 percentage points since 2004 because of the jackpot-like returns they can deliver:

• Intuitive Surgical (NASDAQ:ISRG) has increased more than fivefold since being recommended in 2005.
• A China-based technology company has more than quadrupled in value since being recommended in late 2006.
• Green Mountain Coffee Roasters more than doubled in just about six months.

Of course, these are just short-term results. The real lottery-like payoffs of companies like these come after many years of investing:

Source: Yahoo! Finance.

Those numbers mean that a $5,000 investment in Best Buy 20 years ago would have turned into nearly $1 million today! Now that's a jackpot you can reasonably hope for. It's nowhere near guaranteed, but if you pepper your portfolio with a few Rule Breakers, you can hope for some amazing long-term results.

I invite you to test-drive our Rule Breakers newsletter for free for a month. During that time, you'll have full access to all issues and all recommendations, and you'll see which companies are deemed "Best Buys Now" and which ones are recommended as a "Core" set of Rule Breaker holdings in a portfolio. Simply click here for access to those lists.

Longtime Fool contributor Selena Maranjian owns shares of Intuitive Surgical, eBay, Wal-Mart, and Microsoft. Green Mountain Coffee Roasters and Intuitive Surgical are Motley Fool Rule Breakers picks. Amazon.com, Best Buy, and eBay are Motley Fool Stock Advisor selections. Best Buy, Microsoft, and Wal-Mart Stores are Motley Fool Inside Value recommendations. The Fool owns shares of Best Buy. The Motley Fool is Fools writing for Fools.