Several years ago, I was on the sidelines in all discussions about a brilliant new show called The X-Files. I'd missed the first few episodes, so when I finally tuned in, I didn't know the Cigarette-Smoking Man from the ice-cream man.
But then, right as I was about to give up on the series and accept my fate as a social outcast, Fox was kind enough to provide me with a complete primer, introducing all the characters, explaining the interwoven plot lines, and cluing me in on the will-they-or-won't-they relationship between Mulder and Scully. Finally up to speed, I was a faithful viewer of the show from then on -- at least until the Terminator 2 guy took over for David Duchovny.
Why do I share this story of an early television addiction? Because at 4 p.m. ET today, Motley Fool Rule Breakers will be releasing its annual review issue, bringing you up to speed on all the active recommendations made in the first two years of the service.
Growing or gorging?
Now don't get us wrong: We're buy-to-hold -- and hold-and-hold -- investors. But with growth stocks on the way up, it's always worthwhile to make sure your investment thesis is still applicable. Why? Because sometimes management becomes intoxicated by growth and tries to make its mark on the market. That often steers the company away from its bread and butter in the name of a short-term bump. That's bad -- and certainly not a reason to add new money to a position.
Peter Lynch calls that "diworseification." In One Up on Wall Street, Lynch recalls the tale of General Mills
Ouch. Three decades later, Starbucks
Also consider JDSU
These are all traits to avoid and a reason to stay on top of your portfolio.
When the big picture gets fuzzy
Another reason to give your portfolio a check-up from time to time might be obvious, but it's worth repeating. Take it from Peter Lynch. In his other classic, Beating the Street, he writes: "The best stock to buy may be the one you already own." That's sound advice, but it can be a real challenge to pinpoint the one winner in a portfolio of 10 to 20 stocks.
Moreover, a lot of folks assume value when they see stocks that are substantially down for the year. Others see stocks that are way up and assume they're overpriced. But that's not always the case. The stock that David (Gardner, not Duchovny) and his team are re-recommending to subscribers today is already up more than 20% since it was first singled out by the team.
David was also a big fan of Headwaters
Foolish final thoughts
If you haven't had one in a while, now's a great time for an annual stock check-up. You might just find that one of your studs is turning into a dud, or you might even find a great candidate for new money.
And finally, consider taking a no-obligation 30-day free trial to Rule Breakers today. You'll get to see the company the team feels is the best bet for new money now, as well as a new growth firm that joins the ranks of the Rule Breakers. And you'll get access to all of the initial recommendation write-ups, plus what the team thinks of them now. If you don't like what you see, just quit. But especially with the review issue coming out this afternoon, it's worth a look. After all, the truth is out there.
This article was originally published on Sept. 21, 2005. It has been updated.
Fool contributor Roger Friedman is the managing editor of newsletters and the author of Nipple Confusion, Uncoordinated Pooping and Spittle: The Life of a Newborn's Father . Roger wears pants. He does not own shares of any company mentioned in this article. eBay and Starbucks are Motley Fool Stock Advisor recommendations. The Motley Fool has a disclosure policy.