Larry takes on The Motley Fool

Discuss all general (i.e. non-personal) investing questions and issues, investing news, and theory.

Larry takes on The Motley Fool

Postby Rick Ferri » Fri Mar 04, 2011 5:20 pm

There is quite an entertaining discussion going on under Larry Swedroe's Wise Investing blogon Moneywatch.com. For the last two days, Larry has taken on the Motley Fool's performance record, and it appears someone from the Fool (unconfirmed) is trying to defend it. It's great entertainment! :P

Rick Ferri
Mutual fund investing is simple. There is risk, there is return, and there are costs. All else is marketing.
User avatar
Rick Ferri
 
Posts: 7749
Joined: 26 Feb 2007
Location: Home on the range in Medina, Texas

always interesting

Postby larryswedroe » Fri Mar 04, 2011 6:06 pm

Here are a few relevant quotations to the discussion. I note this type discussion whenever you show contrary evidence to what people believe or are doing (they don't like being shown they might be wrong) or their livelihood depends on it. The first is from Demosthenes who said "What each man wishes, he also believes to be true."

The second is from Upton Sinclair

"It's amazing how difficult it is for a man to understand something if he's paid a small fortune not to understand it."

What always happens is that the attacker picks on several points, they get addressed so they move on to another point, never addressing the fact that the original points were addressed. In this case for example, the claim is of outperformance--but the benchmarks were clearly wrong. Which at the very least is misleading, and for a professional investment site one might say is bordering on a fraud, if not a legal definition of the word, certainly a moral one.

I could go one, but I am sure you get the point.

Watch as I next will be taking on Bill Miller and his 15 stocks to buy that was on the Seeking Alpha site. Stay tuned for that firefight. (:-))

The best one I think was the Waddell & Reed firestorm. Amazing what you get when people feel their livelihood's are threatened.

http://moneywatch.bnet.com/investing/blog/wise-investing/does-waddell-reed-back-up-its-claims/1320/?tag=content;col1
larryswedroe
 
Posts: 11660
Joined: 22 Feb 2007
Location: St Louis MO

Postby ResNullius » Fri Mar 04, 2011 6:13 pm

TMF has been peddling bad investment products for about 6 years, ever since they sold out. The current TMF is a for profit, sell anything that makes money company. Their investment programs are a cut below most, which means stay away.
ResNullius
 
Posts: 2090
Joined: 24 Oct 2007

btw

Postby larryswedroe » Fri Mar 04, 2011 6:15 pm

http://www.stltoday.com/business/columns/david-nicklaus/article_24075305-4ce0-59ac-92fa-495155fc651c.html

For those interested this is link to an interview I did with the local paper-The St. Louis Post Dispatch
larryswedroe
 
Posts: 11660
Joined: 22 Feb 2007
Location: St Louis MO

Postby rustymutt » Fri Mar 04, 2011 6:23 pm

Harry Markopolos

03/19/10 | Report as spam
Larry Swedroe: Crooked as a Virginia Fence

I noticed you're the principal and director of research for The
Buckingham Family of Financial Services. They are a passively
managed shop. It looks like you are looking out for your own
pocket book and not the welfare of the people, shame on you.


That claim begs the question, is a fence in Virginia crooked? And the welfare of what people, the managers at Waddel and Reed?

Hilarious! I own Waddel and Reed stock inside my small cap value fund.
Last edited by rustymutt on Sat Mar 05, 2011 11:33 am, edited 1 time in total.
At the Very Least, Work Hard, Do Your Best, Know the Truth and the Facts and Always Be Honest!
User avatar
rustymutt
 
Posts: 2732
Joined: 7 Mar 2009

rusty

Postby larryswedroe » Fri Mar 04, 2011 7:25 pm

Yes I got a big kick out of that one too.
larryswedroe
 
Posts: 11660
Joined: 22 Feb 2007
Location: St Louis MO

Re: always interesting

Postby SSSS » Fri Mar 04, 2011 7:39 pm

Upton Sinclair wrote:"It's amazing how difficult it is for a man to understand something if he's paid a small fortune not to understand it."


Does the "he's" in this quote mean "he is" or "he has"? Or perhaps... both?
User avatar
SSSS
 
Posts: 1865
Joined: 18 Jun 2010

Postby Rick Ferri » Fri Mar 04, 2011 7:46 pm

Active managers are pushing very expensive ETFs that they say track "passively managed indexes" even though those pseudo-indexes are nothing more than a commoditized active management strategy. So, why wouldn't they accuse a true passive investment advisor of "spamming" the public with information about genuine low=cost index investment strategies?

Such is the state of the world we live in!

Rick Ferri
Mutual fund investing is simple. There is risk, there is return, and there are costs. All else is marketing.
User avatar
Rick Ferri
 
Posts: 7749
Joined: 26 Feb 2007
Location: Home on the range in Medina, Texas

Re: btw

Postby Yipee-Ki-O » Fri Mar 04, 2011 8:00 pm

larryswedroe wrote:http://www.stltoday.com/business/columns/david-nicklaus/article_24075305-4ce0-59ac-92fa-495155fc651c.html

For those interested this is link to an interview I did with the local paper-The St. Louis Post Dispatch

?? When I click on that link I get this:

"Element not valid

The element requested is either not valid or does not exist."

Oh wait, now I see. That last "l" in html didn't quite make it inside the link mentioned.

The comments thread following your W&R blog post is a classic!
Yipee-Ki-O
 
Posts: 156
Joined: 24 May 2009

Re: btw

Postby LazyNihilist » Fri Mar 04, 2011 8:21 pm

larryswedroe wrote:http://www.stltoday.com/business/columns/david-nicklaus/article_24075305-4ce0-59ac-92fa-495155fc651c.html

For those interested this is link to an interview I did with the local paper-The St. Louis Post Dispatch


Larry's link is missing the last letter. Here is the link. http://www.stltoday.com/business/columns/david-nicklaus/article_24075305-4ce0-59ac-92fa-495155fc651c.html.
The only problem is Entropy, leading to the eventual heat death of the universe. [Seen on /.]
User avatar
LazyNihilist
 
Posts: 706
Joined: 19 Feb 2011
Location: 5.82% (xirr)

Postby LazyNihilist » Fri Mar 04, 2011 8:35 pm

It's a shame to see the motley fool do this. I was reading their advice on how it is best for individual investor's should stick with low cost index funds. And then I stumbled on Bogleheads while researching for those index funds.

I don't understand how they can be this absurd. On the one hand they give perfectly good advice to invest in low cost index funds and then go and start actively managed funds. :?
The only problem is Entropy, leading to the eventual heat death of the universe. [Seen on /.]
User avatar
LazyNihilist
 
Posts: 706
Joined: 19 Feb 2011
Location: 5.82% (xirr)

ssss

Postby larryswedroe » Fri Mar 04, 2011 8:43 pm

My assumption is that he is, but I think it works either way.
larryswedroe
 
Posts: 11660
Joined: 22 Feb 2007
Location: St Louis MO

Re: always interesting

Postby richard » Fri Mar 04, 2011 9:14 pm

SSSS wrote:
Upton Sinclair wrote:"It's amazing how difficult it is for a man to understand something if he's paid a small fortune not to understand it."


Does the "he's" in this quote mean "he is" or "he has"? Or perhaps... both?

The usual version of the quote is: It is difficult to get a man to understand something when his salary depends upon his not understanding it.
richard
 
Posts: 7359
Joined: 20 Feb 2007

Re: always interesting

Postby rustymutt » Fri Mar 04, 2011 11:10 pm

richard wrote:
SSSS wrote:
Upton Sinclair wrote:"It's amazing how difficult it is for a man to understand something if he's paid a small fortune not to understand it."


Does the "he's" in this quote mean "he is" or "he has"? Or perhaps... both?

The usual version of the quote is: It is difficult to get a man to understand something when his salary depends upon his not understanding it.


Money can blind men to the truth.
At the Very Least, Work Hard, Do Your Best, Know the Truth and the Facts and Always Be Honest!
User avatar
rustymutt
 
Posts: 2732
Joined: 7 Mar 2009

Re: always interesting

Postby Fallible » Fri Mar 04, 2011 11:36 pm

larryswedroe wrote:Here are a few relevant quotations to the discussion. I note this type discussion whenever you show contrary evidence to what people believe or are doing (they don't like being shown they might be wrong) or their livelihood depends on it. The first is from Demosthenes who said "What each man wishes, he also believes to be true."

The second is from Upton Sinclair

"It's amazing how difficult it is for a man to understand something if he's paid a small fortune not to understand it."

What always happens is that the attacker picks on several points, they get addressed so they move on to another point, never addressing the fact that the original points were addressed. In this case for example, the claim is of outperformance--but the benchmarks were clearly wrong. Which at the very least is misleading, and for a professional investment site one might say is bordering on a fraud, if not a legal definition of the word, certainly a moral one.

I could go one, but I am sure you get the point.

Watch as I next will be taking on Bill Miller and his 15 stocks to buy that was on the Seeking Alpha site. Stay tuned for that firefight. (:-))

The best one I think was the Waddell & Reed firestorm. Amazing what you get when people feel their livelihood's are threatened.

http://moneywatch.bnet.com/investing/blog/wise-investing/does-waddell-reed-back-up-its-claims/1320/?tag=content;col1


Interesting that Waddell & Reed should use such a weak word as "allure" to describe (and sell clients on) active management. Why would anybody pay more for active management because it has an "allure..."??? Shouldn't prospective clients want something a heck of a lot stronger, such as facts that show active management is more lucrative than passive? Or could it be that "allure" is all that active management really has?

Whatever, turns out Larry has the facts, and they're on the side of Passive Management!:)
User avatar
Fallible
 
Posts: 3706
Joined: 27 Nov 2009

Postby shariron » Fri Mar 04, 2011 11:51 pm

I can’t express enough how impressive it is that folks like Larry, Rick, Allan, and so many of the other Pro’s here, have the endless patience to deal with these kind of nonsense replies to their blogs/articles. To put yourself out there, educating people by authoring investment truth and wisdom, then having to spending countless time defending it against ignorance at best, outright lies at worst. I don’t know how you muster the fortitude to do it time and time again, and keep it civil no less. But thank you for doing it.
shariron
 
Posts: 122
Joined: 4 Mar 2009

Re: always interesting

Postby jsnbrnd » Sat Mar 05, 2011 12:10 am

larryswedroe wrote:Here are a few relevant quotations to the discussion. I note this type discussion whenever you show contrary evidence to what people believe or are doing (they don't like being shown they might be wrong) or their livelihood depends on it. The first is from Demosthenes who said "What each man wishes, he also believes to be true."

The second is from Upton Sinclair

"It's amazing how difficult it is for a man to understand something if he's paid a small fortune not to understand it."

What always happens is that the attacker picks on several points, they get addressed so they move on to another point, never addressing the fact that the original points were addressed. In this case for example, the claim is of outperformance--but the benchmarks were clearly wrong. Which at the very least is misleading, and for a professional investment site one might say is bordering on a fraud, if not a legal definition of the word, certainly a moral one.

I could go one, but I am sure you get the point.



Part of Sludell's last comment is:
"Sludell cites an article showing that one of the Motley Fools letters, the Rule Breakers one, was one of the top ones last year. Does that tell us anything about the future. The evidence from Hulbert's studies and other
academic research tells us it means nothing.
Wow.
So....in your column.....you used Mark Hulbert's research to point out that Motley Fool's record doesn't bode well for the future.
And now you're saying that Hulbert's research indicates nothing about future performance?"

He misinterpreted what you wrote, which was that Hulbert et al's research says that a one-year record means nothing, which it doesn't.
jsnbrnd
 
Posts: 417
Joined: 11 Dec 2007

Re: btw

Postby jsnbrnd » Sat Mar 05, 2011 12:11 am

larryswedroe wrote:http://www.stltoday.com/business/columns/david-nicklaus/article_24075305-4ce0-59ac-92fa-495155fc651c.html

For those interested this is link to an interview I did with the local paper-The St. Louis Post Dispatch


What I got was "Element not valid." Element?
jsnbrnd
 
Posts: 417
Joined: 11 Dec 2007

Postby CTBob » Sat Mar 05, 2011 11:24 am

Wow - The guy arguing with Larry said "As a stock investor for the past two decades, I've gone to five main media sources of information and analysis: Wall St. Journal, Barron's, MarketWatch, TheStreet.com, and Motley Fool."

That could have been me a few years ago until I found this forum and started reading a whole different set of authors.

I need these reminders once in a while. Thank you all.
CTBob
 
Posts: 103
Joined: 13 Nov 2009
Location: Connecticut

Postby Quarantine » Sat Mar 05, 2011 12:07 pm

CTBob wrote:Wow - The guy arguing with Larry said "As a stock investor for the past two decades, I've gone to five main media sources of information and analysis: Wall St. Journal, Barron's, MarketWatch, TheStreet.com, and Motley Fool."

That could have been me a few years ago until I found this forum and started reading a whole different set of authors.

I need these reminders once in a while. Thank you all.


I have to agree - if I hadn't come across this forum on my usual googling rampage, I'd still be reading Motley Fool and perhaps all the aforementioned financial porn.
Quarantine
 
Posts: 166
Joined: 31 Jan 2011
Location: Malaysia

Postby rustymutt » Sat Mar 05, 2011 12:16 pm

No way would I ever take the advice of Motley Fools. Their name implies who their advice is for -- Fools!
At the Very Least, Work Hard, Do Your Best, Know the Truth and the Facts and Always Be Honest!
User avatar
rustymutt
 
Posts: 2732
Joined: 7 Mar 2009

Postby Darkwaters » Sat Mar 05, 2011 6:44 pm

And now a comment unrelated to this discussion:

Larry,

Just got your (first?) book, "The Only Guide to A Winning Investment Strategy You'll Ever Need" and have enjoyed it thus far. Been reading through your blog for a while now and have enjoyed it as well - figured I'd go for something with a little more length to it. Keep up the good work.
User avatar
Darkwaters
 
Posts: 77
Joined: 4 Jan 2008
Location: Vicenza, Italy

Postby cinghiale » Sat Mar 05, 2011 9:20 pm

shariron wrote:
I can’t express enough how impressive it is that folks like Larry, Rick, Allan, and so many of the other Pro’s here, have the endless patience to deal with these kind of nonsense replies to their blogs/articles. To put yourself out there, educating people by authoring investment truth and wisdom, then having to spending countless time defending it against ignorance at best, outright lies at worst. I don’t know how you muster the fortitude to do it time and time again, and keep it civil no less. But thank you for doing it.

Yes, impressive, though the response and reaction from a profitable investment advisory business is not surprising. The financial "services" industry makes billions every year convincing investors that they add value with their fund/stock/advisor recommendations. In reality, they function as croupiers, a wonderful expression used by Mr Bogle that pinpoints the identity and function of stockbrokers and advisors: they deal the cards and take their cut. The one sure thing is that the house will always get its cut. When Larry, Rick, or Jack Bogle write blogs or publish articles, they expose the truth: the Emperor has no clothes!! The reaction is swift and sure: they question the character and impugn the motive of the critic.
-- Cinghiale | | "We don't see things as they are; we see them as we are." Anais Nin
User avatar
cinghiale
 
Posts: 831
Joined: 17 Oct 2007

Postby Random Musings » Sat Mar 05, 2011 9:40 pm

As I recall, the Fool had some momentum going into the late 90's during the dot com bubble, but basically that flamed out.

All you have to do is have a bunch of incubator paper funds on the net, and just tout the winners. The fools will follow.

RM
User avatar
Random Musings
 
Posts: 5035
Joined: 22 Feb 2007
Location: Pennsylvania

Postby friar1610 » Sat Mar 05, 2011 9:58 pm

CTBob wrote:Wow - The guy arguing with Larry said "As a stock investor for the past two decades, I've gone to five main media sources of information and analysis: Wall St. Journal, Barron's, MarketWatch, TheStreet.com, and Motley Fool."

That could have been me a few years ago until I found this forum and started reading a whole different set of authors.

I need these reminders once in a while. Thank you all.


I'm 65 and have been retired for 7 years. I first started considering early retirement when I was in my very early 50's although I had been a pretty good saver/investor for years before. One of my first sources of early retirement information was the Motley Fool Early Retirement Home Page which was started by a guy named John Greaney (screen name: intercst) who had previously had his own web site. But he transitioned the discussion stuff over to the MF. I frequented that site for several years and got a lot of good advice - much of it consistent with Bogleheads philosophy. But I also read some of the other MF stuff - in those days they had a lot of model portfolios. One of them was a variation on the "Dogs of the Dow" and I can't remember what all the others were. I never invested in any of those but stuck with mutual funds which, as I got smarter, morphed more and more into VG indexes.

The Retire Early Home Page eventually got hijacked by people who wanted to argue about politics more than they wanted to talk about early retirement, so I gave up on it. So I think the evolution of that discussion board is analogous to the evolution of the Motley Fool web site in general: it ain't what it used to be.

I now regularly follow two financial web sites. This one and
http://www.early-retirement.org/forums/
Friar1610
User avatar
friar1610
 
Posts: 328
Joined: 29 Nov 2008

Postby MarginOfBuffett » Sun Mar 06, 2011 11:49 pm

i like cheese
Last edited by MarginOfBuffett on Wed Mar 09, 2011 2:30 am, edited 1 time in total.
MarginOfBuffett
 
Posts: 96
Joined: 13 Nov 2010

Postby fundtalker123 » Mon Mar 07, 2011 12:12 am

rustymutt wrote:No way would I ever take the advice of Motley Fools. Their name implies who their advice is for -- Fools!


Wasnt' their big claim to fame recommending to back up the truck buying Iomega stock in 1995?
User avatar
fundtalker123
 
Posts: 861
Joined: 27 Feb 2007

Postby Compounding » Mon Mar 07, 2011 9:29 pm

Its very sad to me what has become of the Motley Fool. Back in 1999, their sight was responsible for first educating me on indexing and how actively managed funds fell well-short of an indexed portfolio. I heard it there first. They readily warned that if you didn't have the time, inclination, interest, and work ethic to research individual stocks - then your money belonged in the index fund (of course, I now know that even if you have all those attributes, it hardly helps in picking stocks).

Their website didn't sell stock-picking newsletter subscriptions back then - they ran open public portfolios on their website (Rule Makers and Rule Breakers) and pleaded with people not to mimic them move for move (which people of course did anyway). They got in on AOL back in 1994 and rode the popularity of that wave all the way up. Back then they seemed like good guys fighting the good fight against the expensive and corrupt mutual fund industry. Some of their early books were educational. They were always stock pickers, but I admired their candid warning that it was not for everyone whereas indexing was.

I do wish however I had ingored their "mechanical investing" philosophy - backtesting a bunch of criteria (EPS, momemtum, etc) to produce a formula that historically kills the market. Foolish Four was their most popular - a variation of Dogs of the Dow - and that was killed about 10 years ago. An expensive lesson in how data mining and statistics can make a strategy invincible.... in the past.

Fast forward to 2011 - my have the Fools sold out. Their website is mere buildboard for their vast array of $200/year newsletter services - all the last vestages of the free public education and goodwill they once bragged about are gone. Perhaps they sold their soul to keep the lights on.

As sad and pathetic their turn for the worse has been - I will always owe them a debt of gratitude for being the first ones to educate me on how an index fund beats an actively managed fund hands down. Afterall, Bogleheads.org didn't exist in 1999 (at a time in history that truly needed such a site), and the Morningstar Diehards forum was in its mere infancy. Thank you Fools! I am so thankful I am no longer one. But without them, I may not have been a Boglehead either.
Compounding
 
Posts: 48
Joined: 3 Mar 2007
Location: Charlotte, NC

Postby dphmd » Tue Mar 08, 2011 10:16 am

Compounding wrote:Its very sad to me what has become of the Motley Fool. Back in 1999, their sight was responsible for first educating me on indexing and how actively managed funds fell well-short of an indexed portfolio. I heard it there first. They readily warned that if you didn't have the time, inclination, interest, and work ethic to research individual stocks - then your money belonged in the index fund (of course, I now know that even if you have all those attributes, it hardly helps in picking stocks).


Indeed. Many years ago, I went to the MF website to learn how to get rich in the stock market. The Fools said, basically, that if one didn't have enough money to buy a lot of different blue-chip stocks, one should just buy an index mutual fund. That advice sent me to the Vanguard Diehards forum, where I heard the Gospel According to Jack Bogle. Here I am today, probably thousands (if not tens of thousands) of dollars wealthier because of the investing and personal finance advice I have received. I guess I should send the Fools a thank-you note.
Discipline is freedom.
User avatar
dphmd
 
Posts: 346
Joined: 1 Mar 2007
Location: North Carolina

Postby Compounding » Wed Mar 09, 2011 4:22 pm

Larry, I have always admired how you continue to fight the good fight of what you truly believe in - even in the face of constant resistance and criticism from those that mostly have a vested financial interest in the opposite side. Where you find the time and the patience to debate point-for-point with each one of them in your online postings as you fulfill all your other obligations as author and Principal of your own firm is beyond me.

I thought this might be of interest. I had dusted off my old notes from 1999 from the Motley Fool’s “13 Steps to Investing Foolishly” – a step-by-step primer for those new to investing. Fool.com still has these 13 Steps on their website, but the content has changed significantly over the years. Some of the differences that stood out to me:

- In Step 1 back in the 1999 version, the Fool states that financial/stock-picking newsletters are a waste of time, as they are “self-motivated”. Given the variety of stock-picking products they have in 2011, this is ironic. They also had indicated that its impossible to time the market (but still advocated its possible to pick market-beating stocks).
- In 1999 they claim options investing is useless and to avoid at all costs, as they “often expire worthless due to the time frame”. In 2011 they have a service called Motley Fool Options with a newsletter “Options Edge 2011 – your opportunity to make substantial gains with less risk”. A 180-degree turn in viewpoint. And we all know what the words “more return for less risk” means.
- In 1999, many of their 13 Steps were spent on educating the reader on how to pick their own stocks. Specific criteria and numerical formulas were used with the intent that the individual investor can invests in stock completely on thier own. How to pick Rule Makers, Rule Breakers and the Foolish Four were examples of that. Today, the specifics are gone – replaced by a general overview of what makes a good stock followed by an introduction to their array of “Premium Stock-Picking Services” (for a small fee, of course).
- To their credit, many of the financial basics have stayed the same over the 12 years: get out of bad debt before you invest; have a emergency cash reserve; don’t invest in stocks if you need the money within 5 years; keep your investing costs at a bare minimum; actively managed funds still lose big to index funds. Today, they even quote William Bernstein on risk tolerance and praise index funds: “But for now, we simply recommend that for every dollar you put into individual stocks, you roll the same amount into an index fund”. All good stuff, but somewhat contrary to what they are selling – namely two new mutual funds they created with expense ratios of 1.35% (Great American Fund) and 1.38% (Independence Fund). In Step 11 they indicate not to buy a domestic actively managed fund over 1% - Great American is a domestic fund!

The Fool has certainly changed its tune over the last 12 years: less education on how to do it yourself and more profit-inducing products. And although there are certainly much worse websites of “investment pornography” out there, their evolution has been disappointing. And the hypocrisy of that evolution even more so. Even if one doesn’t think stock-picking is worthwhile, educating the public on balance sheets and what criteria makes a company a good investment had once proved to be an exercise of goodwill in the spirit of education. Most of that goodwill out of the Fool is gone now, making me feel like a mere fool for having once followed them.

- Brian
Compounding
 
Posts: 48
Joined: 3 Mar 2007
Location: Charlotte, NC

Motley Fools

Postby Taylor Larimore » Wed Mar 09, 2011 4:37 pm

Hi Brian:

As a long-time investor and reader of The Fools, your analysis is interesting and offers valuable history for newer investors.

This is an article I wrote for the Fools. To my knowledge, it was never published:

Motley Fool's Interview
"Simplicity is the master key to financial success." -- Jack Bogle
User avatar
Taylor Larimore
Advisory Board
 
Posts: 19730
Joined: 27 Feb 2007
Location: Miami FL

Postby Tyrobi » Wed Mar 09, 2011 7:09 pm

A Motley Fool Ballad

Few Men, who follow Bogle’s Rules,
Grow fat with high-fee diet,
Young Motley and unthinking Fool
Are those that flourish by it.
Three-fund portfolio | "Simplicity is the master key to financial success." John C. Bogle
User avatar
Tyrobi
 
Posts: 542
Joined: 4 Jun 2009

Re: Motley Fools

Postby pkcrafter » Wed Mar 09, 2011 8:32 pm

Taylor Larimore wrote:Hi Brian:

As a long-time investor and reader of The Fools, your analysis is interesting and offers valuable history for newer investors.

This is an article I wrote for the Fools. To my knowledge, it was never published:

Motley Fool's Interview


Yes, Taylor, it was published. But it was published in a subscription newsletter called "Rule Your Retirement."

In addition to the lead article, the newsletter's Wealth Defense section is a tutorial on investing in individual bonds rather than bond funds. The monthly Expert Corner is an interview with Taylor Larimore, co-editor of The Bogleheads' Guide to Retirement Planning on the case for index funds
.

A search on Motley Fool turned up 13 pages listing your name!


Paul
When times are good, investors tend to forget about risk and focus on opportunity. When times are bad, investors tend to forget about opportunity and focus on risk.
pkcrafter
 
Posts: 7872
Joined: 4 Mar 2007
Location: CA

Published article

Postby Taylor Larimore » Wed Mar 09, 2011 8:53 pm

Hi Paul:

Thank you for letting me know the result of your search. Perhaps my time was not wasted.
"Simplicity is the master key to financial success." -- Jack Bogle
User avatar
Taylor Larimore
Advisory Board
 
Posts: 19730
Joined: 27 Feb 2007
Location: Miami FL

Postby somanaut » Wed Mar 09, 2011 10:23 pm

A quick look at my returns shows a 12% return on my Vanguard Funds over the past five years, including the downturn, while my small Fool portfolio, based on picks suggested by that website, is up less than 6% since I started in the middle of this bull market, and lags the S&P by more than 7%. Thankfully the individual stocks make up only ten percent of my stock portfolio.
somanaut
 
Posts: 49
Joined: 23 Dec 2010

Postby peter71 » Thu Mar 10, 2011 12:32 am

Back when FOOLX came out in 2009 we had the below discussion:

viewtopic.php?t=39805&highlight=foolx

We universally ridiculed it, but according to M* (which I trust more than either the Fool or Larry's blog) it's outpeformed:

http://quote.morningstar.com/fund/f.aspx?t=XNAS:FOOLX

Note we didn't say, "oh sure, FOOLX will significantly outperform both of the global indexes M* benchmarks it against, but those won't be the right benchmarks . . ."
peter71
 
Posts: 3769
Joined: 24 Jul 2007

Postby Random Musings » Thu Mar 10, 2011 10:09 am

Peter71 wrote:

Note we didn't say, "oh sure, FOOLX will significantly outperform both of the global indexes M* benchmarks it against, but those won't be the right benchmarks . . ."


When I look at the M* link, FOOLX style map shows that the weighted capitalization of the fund is close to the border of largecap/midcap. I wonder if the global benchmarks used have a higher weighted capitalization, and hence they would have to be blended with some mid-caps to benchmark properly. And, at that point, one coud passively replicate their fund and no true alpha is being created.

I'm thinking yes.

RM
User avatar
Random Musings
 
Posts: 5035
Joined: 22 Feb 2007
Location: Pennsylvania

Postby monkey_business » Thu Mar 10, 2011 11:54 am

It seems the Fools' integrity has been tainted by the dollar. I doubt they no longer believe in their earlier philosophies - they probably just realized that those philosophies won't make them much money and will make their site uninteresting to the masses. After all, which article would the average person find more interesting:

"Low Cost Index Investing - The Key To Slow and Sustainable Wealth Building"
vs.
"Top 5 Stocks Set To Explode - Opportunities Neither You Nor Your Portfolio Can Afford To Miss!"
User avatar
monkey_business
 
Posts: 527
Joined: 21 Jan 2010

Postby noyopacific » Fri May 13, 2011 3:15 pm

I thought it was an excellent article but in defense of The Motley Fool, it would be probably be difficult or impossible to run a successful commercial site that was dedicated to promoting index funds. Although I believe that passive management is the best choice for me, the sad fact is it simply isn't very entertaining. Outside of the Bogleheads group, I've found that index fund investing is a rather lonely pursuit.

A am also impressed by the patience, civility and character that Larry & others have when responding to hostile and often ignorant individuals.

Thanks,
The information contained herein, while not guaranteed by us, has been obtained from from sources which have not in the past proved particularly reliable.
User avatar
noyopacific
 
Posts: 187
Joined: 28 Jan 2009
Location: Mendocino

Re: always interesting

Postby nisiprius » Fri May 13, 2011 6:02 pm

larryswedroe wrote:The second is from Upton Sinclair

"It's amazing how difficult it is for a man to understand something if he's paid a small fortune not to understand it."
It took me a while to find the source, because most of Google's hits were reference to John C. Bogle, who uses that quotation frequently.

Wikiquotes has:

"I used to say to our audiences: 'It is difficult to get a man to understand something, when his salary depends upon his not understanding it!'"

--I, Candidate for Governor: And How I Got Licked (1935), ISBN 0-520-08198-6; repr. University of California Press, 1994, p. 109.

And Google Books finds a page image. It's a reference to his EPIC program (End Poverty in California), which proposed to do so, the Wikipedia article says, by "having the state of California take over idle factories and farmland, which would then be run as cooperatives in the theme of production for use, instead of production for profit. The idea was to use these cooperatives to put the unemployed back to work."

EPIC planned to pay a $50/month pension to retirees. Sinclair wrote that the newspapers "would challenge me to say where I was going to get the money, and when I answered they did not published what I said. Impossible for any publisher of a commercial newspaper to understand the difference between a profit system in a state of collapse, driving the State and everybody in it to bankruptcy, and a system of production for us in growth, providing security and plenty for all. I used to say to our audiences: 'It is difficult to get a man to understand something, when his salary depends upon his not understanding it!'"
Annual income twenty pounds, annual expenditure nineteen nineteen and six, result happiness; Annual income twenty pounds, annual expenditure twenty pounds ought and six, result misery.
User avatar
nisiprius
Advisory Board
 
Posts: 24778
Joined: 26 Jul 2007
Location: The terrestrial, globular, planetary hunk of matter, flattened at the poles, is my abode.--O. Henry


Return to Investing - Theory, News & General

Who is online

Users browsing this forum: Baidu [Spider], Beliavsky, Bing [Bot], dratkinson, EN61577, freebeer, fsrph, jpasc, Karamatsu, newtonc, nonplussed, prudent and 74 guests