If you've developed as an investor on a steady diet of Benjamin Graham and Warren Buffett, you're not going to like this story. I'm going to suggest breaking just about every one of their rules:

  • Find innovative companies that aren't yet profitable.
  • Look for high P/Es.
  • Check and see whether there's a heavy short interest.

Then, buy those companies.

So which companies am I going to lay down money on, and why am I taking this approach? I'll tell you in a moment, but first, let me explain how I got started on this quest for winning stocks.

The backstory
I'm an avid fan of David Gardner's Rule Breakers style of stock picking. I once asked David, "Are you worried that the more popular your style becomes, the less profitable it might be?"

His response, generally, went something like this:

  1. "No matter how popular my style of investing gets, it will still dwarf the style used by institutional investors, who command the lion's share of the market’s money."
  2. "Because my style of investing goes against human nature (specifically, loss aversion), when the downturns hit, many people will flee this style of investing."

A crazy portfolio?
It's the second part of David's response that has really stuck with me. To invest successfully, I have to be willing to fight against my urge to flee toward "safe" investments. Or, as I like to think of it, to invest like a Rule Breaker, you have to be a little crazy.

With that in mind, I've decided to devote a part of my retirement portfolio toward Rule Breaker-type investments and name it my Crazy Portfolio. To be absolutely clear, I'm not managing the Fool's money or making official recommendations here; I'm just sharing my own personal picks.

Instead of kidding myself into thinking that I have superhuman powers that render me unaffected by normal human emotions, I'll readily acknowledge that it isn't easy being a Rule Breaker. Calling my group of investments the Crazy Portfolio will serve as a constant reminder.

A crazy portfolio!
I'm looking to create a 10-stock portfolio. Following are the first five companies I'm investing my own money in, with a quick look at what they do, what their P/Es are, and how much of their float (shares available for trading) short sellers have sold.


What It Does/Sells


% of Float Short

Westport Innovations (Nasdaq: WPRT) Natural gas engines



Travelzoo (Nasdaq: TZOO) Travel and local deals



Ancestry.com (Nasdaq: ACOM) Genealogy website



Green Mountain Coffee Roasters (Nasdaq: GMCR) Keurig coffee makers



lululemon athletica (Nasdaq: LULU) Female sportswear



Source: finviz.com. NM = not meaningful because of losses.

Though not profitable yet, Westport Innovations offers an enticing opportunity to invest in a company that could represent the wave of the future. Westport's team of engineers has developed engines that can be used in everything from cars to long-haul trucks. Partnerships with engine maker Cummins (NYSE: CMI) and General Motors make this pick look like it could be a long-term winner.

Travelzoo, on the other hand, has quietly developed into a two-headed beast that's dominating its niche of the "deals" world. For more than a decade, it's been giving its loyal subscribers travel deals that can't be found anywhere else on the Internet. Recently, it's been making even more headlines with its Local Deals service, which aims to provide two quality deals per week for every market the company serves.

If you want to know where you're from, Ancestry.com is the place to go. The company has digitized huge numbers of records from sources including Ellis Island and the U.S. census, and it has now taken its service abroad. Not only is its product gaining popularity in Europe, but Ancestry's employees have begun digitizing records from across the pond as well.

Green Mountain's Keurig coffee makers have quickly become ubiquitous in offices and kitchens across the country. Some observers think this company is wildly overvalued, yet it continues to fire on all cylinders. Partnerships with the likes of Starbucks give investors reason to be optimistic moving forward.

Finally, you can think of lululemon as an Under Armour (NYSE: UA) type of retailer aimed primarily at women. Originally started with a sole focus on yoga, it has expanded into running apparel, as well as products for men. The company, which still has lots of room for growth in the United States, showed a 16% increase in same-store sales last quarter and has a record for confounding Wall Street expectations.

Foolish takeaway
If you want to keep tabs on these five companies, I suggest you add them to your watchlist. If, on the other hand, you want a second opinion, I'm willing to give you access to a special free report titled "5 Stocks The Motley Fool Owns — And You Should Too." In it, you'll find a report of five companies hand-picked by The Motley Fool's top analysts. It's yours, today, absolutely free.

This article represents the opinion of the writer, who may disagree with the “official” recommendation position of a Motley Fool premium advisory service. We’re motley! Questioning an investing thesis -- even one of our own -- helps us all think critically about investing and make decisions that help us become smarter, happier, and richer.