When the Motley Fool Rule Breakers newsletter service launched this past autumn, it was easy to get excited. From 1994 to 2003, Fool co-founder David Gardner put the same ultimate growth investing philosophy to the test. He aced it. His real-money portfolio more than doubled the S&P 500's annualized return before our readers' very eyes.

I've been part of the Fool family since 1995. I had the good fortune of writing more than a few of the daily portfolio recaps that summarized those hearty returns. It was galvanizing. It was special. Could we ever be so blessed as to catch lightning in a bottle again?

Our premium Rule Breakers service was launched seven months ago. It had a favorable tailwind behind it, as two out of every three picks in our other monthly research products were handily trouncing the market.

We had history. We had momentum. And we had a nasty spill coming out of the gate.

The glass is 36% full
Seven issues into our growth-stock legacy and, I'll be honest with you, things haven't gone so well by conventional standards. Not that Rule Breaking is a conventional investing experience. There are some serious shortcomings in trying to box a long-term investing strategy, particularly one specializing in ultimate growth opportunities, into a performance window that is just a few months wide. Some of the promising areas we cover, such as biotechnology and nanotechnology, either take years of simmering or are just in their growth cycle's infancy. Still, we won't shy away from the critics and the reality that our perpetually updated scorecard has gone a little heavy on the red for our tastes.

At the moment, just five of our first 14 stock recommendations are ahead of the market. If you prefer to look at the inverse -- the part of the glass that is empty -- nine of our 14 equity picks are lagging behind the S&P 500 right now.

There's no shame in owning up to that. Whether you love the Fool or think we've got the fiscal cooties, odds are that you've come to realize that we value integrity and accountability. You just don't last as long as we have without warming up to those traits early and often.

So I'm not going to get into our winners this time. Years from now, our marketing materials will bore you to bits with those accolades. If you want to learn more about the winners -- five of our selections are beating the market, and two are trouncing it -- you are more than welcome to take us up on a 30-day free trial.

But today, we will be taking a closer look at some of our losers -- our current losers. Let's go back to the inaugural collector's issue. I'm staring at a virtual copy of that October issue -- mint condition, mind you -- and I'll be quick to tell you that we had, and continue to have, high hopes for Blue Nile (NASDAQ:NILE).

For those who have never heard of it, Blue Nile is a high-end online jeweler specializing in fine engagement rings. While most Internet-based retailers specialize in cheaper cosmetic jewelry -- even Amazon.com (NASDAQ:AMZN) and Overstock.com (NASDAQ:OSTK) are doing that these days -- Blue Nile is the first mover in a lucrative upscale niche. The company is very profitable. It earned $0.56 a share last year on a 31% spike in sales. It is looking to earn between $0.67 and $0.72 a share this year, with sales growing by 18% to 25%. So what's wrong? Why is the share price 11% lower than when David first singled out the stock's engaging premise?

I've read the initial recommendation report. Yes, those archived issues are available 24/7 to all subscribers. I don't see any fundamental flaw in Blue Nile. It has delivered the goods. It is clearly still a Rule Breaker. We may have jumped in a few months too early, but that still looks like it will ultimately be better than not having gotten in at all.

That's the upside to looking at some of the red-inked returns in our scorecard. If the stories are intact -- and they are, for the most part -- you may be looking at a growth-stock bargain.

Beyond the first stumble
That doesn't mean that I think they will all bounce back; they all don't have to bounce back for the Rule Breaker philosophy to be successful. To date, our most walloped pick is a prolific stun-gun maker. The stock initially traded higher after our recommendation in December, but the past few months have been brutal for the first mover and market leader. Consumer perception of the weapon's safety has been publicly questioned. Precincts have cooled on new orders. The company had to lower sales forecasts for the most recent quarter. The beleaguered company still has an amazing story to tell, but you can see why investors are worried that the growth trajectory has been altered -- perhaps permanently.

That's the beauty of walking through the Rule Breaker ruins. There you will find a company like Shanda Interactive (NASDAQ:SNDA). The stock is off by 25% since being tapped as an official pick in the January issue. Shanda is still the leader in online gaming in the populous country of China. It still commands fat profit margins. The region's future remains just as bright, as more of the country goes online and disposable income improves to the point where Shanda can charge more for its addictive diversions. Go ahead, take me up on the 30-day free trial challenge and read the initial report. Tell me what has changed for the worse with Shanda. Nothing, right? If you can appreciate a company like its stateside counterpart, Electronic Arts (NASDAQ:ERTS), what's not to like about Shanda? It's still a great company -- only now it's available for a quarter less than before.

Are fallen Rule Breakers garage sale Picassos? In many cases, I would say yes. One of our March recommendations is a nanotechnology stock trading for 22% less than when we first made the pick. Yes, nanotechnology -- the technology of tomorrow -- is suddenly cheaper today than it was a few weeks ago. Now do you see why my mouth waters in Pavlovian fashion when I see our scorecard draped in bloodied shades of crimson? Dig into our archives, and you'll find a biotech company trading at a discount to our original optimism, even though it is now that much closer to FDA approval of a blockbuster drug.

Am I suggesting that you wait a few months before cracking open the new May issue? Of course not. When you think about our newsletter service's brief life -- the average pick has been trading for fewer than four months since its recommendation -- it's important not to rush to any conclusions on long-term performance. Yes, I would have written that even if 10 of our first 14 picks were hitting it over the left field fence. Patience is the key -- even more so than perfect timing. Going back to the original Rule Breaker real-money portfolio, the 2,418% gain on shares of America Online took place over the course of years -- not mere trading days -- and was not achieved without a good deal of volatility along the way. Some of David's biggest winners, such as eBay (NASDAQ:EBAY) and the once-mighty Iomega (NYSE:IOM), had jagged-looking charts during their legendary ascents. Getting in early was great. Getting in early and during price dips was often even better.

Right now, if you are itching to buy, that inherent volatility works in your favor. Investors thrive on opportunity, and the fact that many of these dynamic stocks are trading for less than when they earned our initial respect (and recommendation) should be appealing to even the most ardent cynic.

Although momentum is on hiatus, it's always comforting to have history on your side. At the moment for Rule Breakers subscribers, history just happens to be trading at a discount.

Rule Breakers is about more than just a pair of monthly stock recommendations. Every issue features dedicated columns highlighting many other stock ideas in nanotechnology, biotechnology, and early adopters. Also included in the subscription service are a vibrant online discussion board community and perpetual stock updates on all of our active recommendations. Take a risk-free 30-day trial on us by clicking here.

Longtime Fool contributor Rick Munarriz thinks that there is a certain charm in shopping for growth at the sales rack -- just make sure you don't find any holes in what you try on for size. He does not own shares in any of the companies mentioned in this story. The Fool has a disclosure policy. He is part of the Rule Breakers newsletter research team, seeking out tomorrow's ultimate growth stocks a day early.