Motley Fool,,,am I right about this?

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jhendrix
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Motley Fool,,,am I right about this?

Post by jhendrix » Mon Feb 10, 2020 1:57 pm

I have searched and read all of the already posted motley fool topics here at the forum. I have a theory and I know it might be a "no duh genius" moment here but I would like to hear from some of you who are more experienced than myself. Been a subscriber to motley fool for about two years now. Was somewhat excited about the system and over the years have invested a total of about $20,000 with them and have done well. (who hasn't) In the last few months I have decided to kick the fool habit and put all the money back into my 4 fund port. Reason being: they tout the total returns from the beginning of their existance and yes they are unbelievable. But they also, from their podcast and online site, recommend a certain number of stock picks. From my perspective when they tout their "total" return on all their picks then one would have only received the same results if they had invested in ALL of their recommendations. If someone had only invested in the small number they suggest without buying every suggestions they would not have been able to score the same percentage growth they push on their web site. So if they show the total results from all of their suggestions over the years but someone only picked a handful of them then how could anyone expect the same fabulous growth percentages. you would have had to purchase every stock recommend at the same percentage to achieve the goals they tout. So again, If you show results from 150 stocks as gaining an average of 140% but recommend to investors to only own around 40 to 50 then the average you tout on your web site in meaningless. It only worked if you bought the same amount of every stock every time, every year. Am I making sense and am I right about this?

BogleMelon
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Re: Motley Fool,,,am I right about this?

Post by BogleMelon » Mon Feb 10, 2020 2:04 pm

OP, it is simple, if Motley Fool know which stock is the next Netflix or Amazon, they wouldn't sell you that information. They would keep it to themselves and be billionaires in no time.

Not only that, but if they know which stocks would bring them profits that is equal to or more than the subscription fees for their customers, they again, would keep that information to themselves, and make money by shorting these stocks instead of trying to convince customers to subscribe.
"One of the funny things about stock market, every time one is buying another is selling, and both think they are astute" - William Feather

core4portfolio
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Re: Motley Fool,,,am I right about this?

Post by core4portfolio » Mon Feb 10, 2020 2:10 pm

There are lot of people who does M1 Finance and buy their slices at same percentage every month.
Many concentrate on their 10 to 20 stocks. Its good to move to index funds. I personally have 90% on index and 5 to 10% individual stocks.
Out of curiosity, I wonder whats your individual portfolio looks like and what portfolio visualizer SIM says ?
if you have individual stocks then use dollar based investing might works however risk is more
Allocation : 80/20 (80% TSM, 20% TBM) | Need to learn fishing sooner

NotTooDeepLearning
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Re: Motley Fool,,,am I right about this?

Post by NotTooDeepLearning » Mon Feb 10, 2020 2:12 pm

Motley fool loses me when I see their ads for a rare "all in" recommendation every week.

jharkin
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Re: Motley Fool,,,am I right about this?

Post by jharkin » Mon Feb 10, 2020 2:15 pm

Don't forget the "$16,286.34 Social Security trick that you are not using". :twisted:

MotoTrojan
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Re: Motley Fool,,,am I right about this?

Post by MotoTrojan » Mon Feb 10, 2020 2:29 pm

BogleMelon wrote:
Mon Feb 10, 2020 2:04 pm
OP, it is simple, if Motley Fool know which stock is the next Netflix or Amazon, they wouldn't sell you that information. They would keep it to themselves and be billionaires in no time.

Not only that, but if they know which stocks would bring them profits that is equal to or more than the subscription fees for their customers, they again, would keep that information to themselves, and make money by shorting these stocks instead of trying to convince customers to subscribe.
If they went all in on the stock which they feel is the next winner, it would only help them to get others onboard. Likewise for shorting stocks. In-fact it is quite common for people with large short positions to talk down a stock to try and boost their profit.

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greg24
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Re: Motley Fool,,,am I right about this?

Post by greg24 » Mon Feb 10, 2020 2:45 pm

Has an independent body verified their claims?

02nz
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Re: Motley Fool,,,am I right about this?

Post by 02nz » Mon Feb 10, 2020 2:47 pm

BogleMelon wrote:
Mon Feb 10, 2020 2:04 pm
OP, it is simple ...
I thought KlangFool had a copyright on starting posts this way! :D

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Watty
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Re: Motley Fool,,,am I right about this?

Post by Watty » Mon Feb 10, 2020 3:16 pm

If you get by a used book store or a library try to look at some Motley Fool books from the 1990's.

One of the ironies is that the "Fool" part of the name came from the fact that any "Fool" could beat the "wise" investment advisors who were selling newsletters, actively managed mutual funds, and stock picking advice but just buying some index funds or a few simple strategies like the Dogs of the Dow, Foolish Four, etc.

When the Dot Com bust hit their business model of selling advertising on their web site failed so they then started...selling newsletters, actively managed mutual funds, and stock picking advice ...that they had previously derided as being something to avoid that were being sold by the so called "wise".

It turned out that their simple strategies did not work so well and they kept replacing them with new strategies until they happened to get some that worked well so there is a lot of survivorship bias in the results they tout.

rich126
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Re: Motley Fool,,,am I right about this?

Post by rich126 » Mon Feb 10, 2020 3:17 pm

Like most of those type of services there are a few issues.

1. Premium services that don't do well are dropped so those losses are hidden. I think they had a Global Stock service that did dreadful.

2. They only recommend buys, and often 2 per month. So either you have to buy and hold and hold and hold or figure out when to sell on your own. Otherwise over the years you will have 50+, 100+ stocks.

3. They often tell you to buy more on market drops. Well if they are also telling you to be fully invested where is this money coming from? From #2 above, they certainly don't tell you when to sell (at least on most of their services that I've seen, maybe some of their ultra premium services they do).

I use their free discussion boards that have some knowledgeable people. Most of the boards there have a lot of "noise". And many on the boards don't exactly have a high opinion of the service.

oko
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Re: Motley Fool,,,am I right about this?

Post by oko » Mon Feb 10, 2020 5:02 pm

I am a MF subscriber for years. I cannot invest in mutual funds/ETFs for ethical and religious purposes, so I invest in individual stocks. MF reduces the number of stocks to look at, that's the main reason I am subscribed to them. I only invest a subset of their recommendations.

BTW: They have a mutual fund for a while, and I am sure they invest in their own recommendations. And as far as I know, their mutual funds is not performing much (any?) better than index funds so you can get an idea from there :-).

As far as my investments: I have 49 of their recommendations now (I have 51 stocks total). I sometimes beat SP500, sometimes cannot. In the last two years, I beat SP500 by 11.2% and 8.6%.

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Re: Motley Fool,,,am I right about this?

Post by hicabob » Mon Feb 10, 2020 5:08 pm

I used to follow MF when they started. They had a few public portfolios and when a few did horribly they discontinued those particular ones. I stopped paying any attention to them after that sleaziness but I'm sure it made their long term record look better.

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jhendrix
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Re: Motley Fool,,,am I right about this?

Post by jhendrix » Mon Feb 10, 2020 11:11 pm

Just got off work, thanks all for the opinions. oko, I was interested in what you said about 50 stocks you have. That was in general what I was trying to consider. Yes you did well just as I did but my thought is that almost anyone would do as well as we have picking any descent stocks in this market. But I dont think their is actually a way to say you could achieve their results if you only bought even 3/4 of the hundreds of suggestions they have made through the years. But they advertise that they have beaten the market by some crazy number like 144%. That may be so but I am sure they figure in the hundreds of stock suggestions through the years and include all the winners and losers but what if I bought only 100 stocks and passed on their top 10 performers. I doubt I would have the same success. That to me is the elephant in the room. Their is no way they can claim that anyone who pays can ,or even will, have the same success. It would be impossible unless you bought the same amount of every stock they have ever suggested which is probably in the hundreds.

manatee2005
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Re: Motley Fool,,,am I right about this?

Post by manatee2005 » Mon Feb 10, 2020 11:32 pm

jhendrix wrote:
Mon Feb 10, 2020 11:11 pm
Just got off work, thanks all for the opinions. oko, I was interested in what you said about 50 stocks you have. That was in general what I was trying to consider. Yes you did well just as I did but my thought is that almost anyone would do as well as we have picking any descent stocks in this market. But I dont think their is actually a way to say you could achieve their results if you only bought even 3/4 of the hundreds of suggestions they have made through the years. But they advertise that they have beaten the market by some crazy number like 144%. That may be so but I am sure they figure in the hundreds of stock suggestions through the years and include all the winners and losers but what if I bought only 100 stocks and passed on their top 10 performers. I doubt I would have the same success. That to me is the elephant in the room. Their is no way they can claim that anyone who pays can ,or even will, have the same success. It would be impossible unless you bought the same amount of every stock they have ever suggested which is probably in the hundreds.
You're overthinking it.

wyoming82240
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Re: Motley Fool,,,am I right about this?

Post by wyoming82240 » Mon Feb 10, 2020 11:57 pm

Look at their etf and mutual fund performance. If they are good stock pickers that should reflect in their funds performance.

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peterinjapan
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Re: Motley Fool,,,am I right about this?

Post by peterinjapan » Tue Feb 11, 2020 3:50 am

I used to be part of the MF community, but they decided they love being the spammiest entity on the Internet, and I avoid them like the plague now.

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jhendrix
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Re: Motley Fool,,,am I right about this?

Post by jhendrix » Tue Feb 11, 2020 9:29 am

manatee2005 wrote:
Mon Feb 10, 2020 11:32 pm
jhendrix wrote:
Mon Feb 10, 2020 11:11 pm
Just got off work, thanks all for the opinions. oko, I was interested in what you said about 50 stocks you have. That was in general what I was trying to consider. Yes you did well just as I did but my thought is that almost anyone would do as well as we have picking any descent stocks in this market. But I dont think their is actually a way to say you could achieve their results if you only bought even 3/4 of the hundreds of suggestions they have made through the years. But they advertise that they have beaten the market by some crazy number like 144%. That may be so but I am sure they figure in the hundreds of stock suggestions through the years and include all the winners and losers but what if I bought only 100 stocks and passed on their top 10 performers. I doubt I would have the same success. That to me is the elephant in the room. Their is no way they can claim that anyone who pays can ,or even will, have the same success. It would be impossible unless you bought the same amount of every stock they have ever suggested which is probably in the hundreds.
You're overthinking it.
manatee, thanks for commenting and I mean this with all respect, But do you think I am correct in what I am saying? I believe if we take the time to overthink investment advice like this then it shows the fallacy in their hype

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Re: Motley Fool,,,am I right about this?

Post by Dottie57 » Tue Feb 11, 2020 11:10 am

Watty wrote:
Mon Feb 10, 2020 3:16 pm
If you get by a used book store or a library try to look at some Motley Fool books from the 1990's.

One of the ironies is that the "Fool" part of the name came from the fact that any "Fool" could beat the "wise" investment advisors who were selling newsletters, actively managed mutual funds, and stock picking advice but just buying some index funds or a few simple strategies like the Dogs of the Dow, Foolish Four, etc.

When the Dot Com bust hit their business model of selling advertising on their web site failed so they then started...selling newsletters, actively managed mutual funds, and stock picking advice ...that they had previously derided as being something to avoid that were being sold by the so called "wise".

It turned out that their simple strategies did not work so well and they kept replacing them with new strategies until they happened to get some that worked well so there is a lot of survivorship bias in the results they tout.

+1. I followed Motley Fool in the 90’s. Now they seem to look for fools. Now they are not worth my time.

magicrat
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Re: Motley Fool,,,am I right about this?

Post by magicrat » Tue Feb 11, 2020 12:31 pm

jhendrix wrote:
Mon Feb 10, 2020 11:11 pm
But they advertise that they have beaten the market by some crazy number like 144%.
Have you thoroughly verified this claim?

decapod10
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Re: Motley Fool,,,am I right about this?

Post by decapod10 » Tue Feb 11, 2020 3:32 pm

Don't know about Fool specifically, but many of these types of claims suffer from survivorship bias. Sports betting touts are notorious for this as well.

They say look at our tour Billy, he's hitting 65% of his picks. And you look back and they can back it up with lists of his previous picks that they have published over time.

However, the trick to this is this they will publish a bunch of people's picks (some even claim they don't exist and just made up names). By chance, some of them do well. If you put 50 people up, inevitably a handful can hit 60, 70, or even 80%. Then, They quietly get rid of the bad performers and keep the amazing ones, and then you see a lot of "proven" high performers.

Mutual funds have the same issue. The "bad" fund get closed, the ones that happen to do well stay open, makes everything look great. But much of what happens is chance. If you take one of those high performers and then follow them prospectively, you often find their performance will not be so good.


I can guarantee you that I can make stock picks that will beat the S&P 500 over the next 5 years. I'll just pick 100 stocks, put them on my website, then hide all the ones that do poorly after the fact.

But again, I don't know anything about Fool's picks or their process, so can't say for sure whether their claims are legitimate.

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jhendrix
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Re: Motley Fool,,,am I right about this?

Post by jhendrix » Tue Feb 11, 2020 6:31 pm

magicrat wrote:
Tue Feb 11, 2020 12:31 pm
jhendrix wrote:
Mon Feb 10, 2020 11:11 pm
But they advertise that they have beaten the market by some crazy number like 144%.
Have you thoroughly verified this claim?
advertise up 397% since 2002
compared to the S&P which is up 103% during same time

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Phineas J. Whoopee
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Re: Motley Fool,,,am I right about this?

Post by Phineas J. Whoopee » Tue Feb 11, 2020 7:05 pm

jhendrix wrote:
Tue Feb 11, 2020 6:31 pm
magicrat wrote:
Tue Feb 11, 2020 12:31 pm
jhendrix wrote:
Mon Feb 10, 2020 11:11 pm
But they advertise that they have beaten the market by some crazy number like 144%.
Have you thoroughly verified this claim?
advertise up 397% since 2002
compared to the S&P which is up 103% during same time
Does either figure include reinvestment of dividends?

PJW

Horsefly
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Re: Motley Fool,,,am I right about this?

Post by Horsefly » Tue Feb 11, 2020 7:19 pm

Some years ago (of note, before I found BH), I subscribed briefly to their Stock Advisor package. That let me see several of their recommendations that they didn't publish openly. The way they sold it was that it was the best picks that were available. However, within a week or two of starting the subscription I started receiving a near-daily pitch trying to up-sale me to whatever the next better package was. This really pissed me off: They sold me on the idea that the brothers were going to tell me the best picks when I signed up for SA, but then they told me that actually the *BEST* picks were in the next package up. I called and cancelled my subscription after less than a month. The only good thing I can say about them is that they gave me a full refund.

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jhendrix
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Re: Motley Fool,,,am I right about this?

Post by jhendrix » Wed Feb 12, 2020 11:08 am

Phineas J. Whoopee wrote:
Tue Feb 11, 2020 7:05 pm
jhendrix wrote:
Tue Feb 11, 2020 6:31 pm
magicrat wrote:
Tue Feb 11, 2020 12:31 pm
jhendrix wrote:
Mon Feb 10, 2020 11:11 pm
But they advertise that they have beaten the market by some crazy number like 144%.
Have you thoroughly verified this claim?
advertise up 397% since 2002
compared to the S&P which is up 103% during same time
Does either figure include reinvestment of dividends?

PJW
great question, could not find out

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jhendrix
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Re: Motley Fool,,,am I right about this?

Post by jhendrix » Wed Feb 12, 2020 11:21 am

Thanks for all the advice and replies. Like I said I did cancel but I wanted to find out what others thought of motley fool. Hard to know if the brothers really believe in what they are saying, seems as if they really do and it seems as if the numbers are accurate as far as the growth numbers are concerned. They are a stock pick service that recommends adding to the stock picks which are gaining. Personally I think what they offer "could" work but only if you max out all thier picks. But then again they recommend that you don't which seems contrary to the huge gains that they show. In the end I think the service touts numbers that are not possible. For example: If I have offered 100 stock picks over the last 10 years and I take all of those picks and get and average of 300% gains, but then I recommend that you only pick 25 of those then their is no way I should be able to expect you to have the same gains. Again, I appreciate the input.

core4portfolio
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Re: Motley Fool,,,am I right about this?

Post by core4portfolio » Wed Feb 12, 2020 11:28 am

I have one question though.. how do you know when to sell these picks ?
if it reached X gain then will you sell or you hold forever till retirement on these individual picks ?
Allocation : 80/20 (80% TSM, 20% TBM) | Need to learn fishing sooner

rascott
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Re: Motley Fool,,,am I right about this?

Post by rascott » Wed Feb 12, 2020 11:31 am

If you haven't attempted to manage a portfolio with 50+ stocks in it.... you don't realize how painful it can be. 100? Yikes. I guess you could use M1 platform to take some of the pain out of it.... but I don't see the point. You aren't going to crush the market with a 100 stock portfolio.... you'll likely just kind of hug it on one side or the other.

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Forester
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Re: Motley Fool,,,am I right about this?

Post by Forester » Wed Feb 12, 2020 12:40 pm

Motley Fool is annoying, it pollutes my Google News alerts.

"If I had $50k this is the dividend stock I would buy" repeated to infinity. 100% of their potential readership should be buying index funds.

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jhendrix
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Re: Motley Fool,,,am I right about this?

Post by jhendrix » Wed Feb 12, 2020 10:06 pm

core4portfolio wrote:
Wed Feb 12, 2020 11:28 am
I have one question though.. how do you know when to sell these picks ?
if it reached X gain then will you sell or you hold forever till retirement on these individual picks ?
Being a member of their service, they suggest a new stock twice monthly to purchase. You keep said stocks until they give you a "sell alert". So you supposedly are given a stock to buy twice every month. You only sell stock when they suggest. Most are held for years, or until they make a sell "recommendation".

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calmaniac
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Re: Motley Fool,,,am I right about this?

Post by calmaniac » Wed Feb 12, 2020 10:32 pm

I read several of their books in the late nineties, early in my investing career. Seemed very reasonable at the time...

Fast forward through the dot-com bubble and the great recession and MF just reads like high-octane click bait:
3 reasons why APPL stock will make you a better lover, or some such....

core4portfolio
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Re: Motley Fool,,,am I right about this?

Post by core4portfolio » Thu Feb 13, 2020 1:37 am

jhendrix wrote:
Wed Feb 12, 2020 10:06 pm
core4portfolio wrote:
Wed Feb 12, 2020 11:28 am
I have one question though.. how do you know when to sell these picks ?
if it reached X gain then will you sell or you hold forever till retirement on these individual picks ?
Being a member of their service, they suggest a new stock twice monthly to purchase. You keep said stocks until they give you a "sell alert". So you supposedly are given a stock to buy twice every month. You only sell stock when they suggest. Most are held for years, or until they make a sell "recommendation".
you can create pies in M1 finance to easily manage with...
will you do any analysis like reading balance sheet etc ?
Since you are selling before retirement, dont it cause huge tax gains ??
whats weightage of these stocks ? since you add new stock based on recommendation, how do you manage the allocation ?
Allocation : 80/20 (80% TSM, 20% TBM) | Need to learn fishing sooner

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Phineas J. Whoopee
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Re: Motley Fool,,,am I right about this?

Post by Phineas J. Whoopee » Thu Feb 13, 2020 6:35 pm

With respect to Motley Fool, this sponsored advertisement has been shown at reuters.com, my former preferred source for financial news, for at least four months:

Motley Fool Issues Rare "All-in" Buy Alert

Thomson Reuters divested everything Reuters-related except the brand name for their reconstituted news service.

PJW

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Re: Motley Fool,,,am I right about this?

Post by abuss368 » Fri Feb 14, 2020 10:36 pm

jhendrix wrote:
Mon Feb 10, 2020 1:57 pm
I have searched and read all of the already posted motley fool topics here at the forum. I have a theory and I know it might be a "no duh genius" moment here but I would like to hear from some of you who are more experienced than myself. Been a subscriber to motley fool for about two years now. Was somewhat excited about the system and over the years have invested a total of about $20,000 with them and have done well. (who hasn't) In the last few months I have decided to kick the fool habit and put all the money back into my 4 fund port. Reason being: they tout the total returns from the beginning of their existance and yes they are unbelievable. But they also, from their podcast and online site, recommend a certain number of stock picks. From my perspective when they tout their "total" return on all their picks then one would have only received the same results if they had invested in ALL of their recommendations. If someone had only invested in the small number they suggest without buying every suggestions they would not have been able to score the same percentage growth they push on their web site. So if they show the total results from all of their suggestions over the years but someone only picked a handful of them then how could anyone expect the same fabulous growth percentages. you would have had to purchase every stock recommend at the same percentage to achieve the goals they tout. So again, If you show results from 150 stocks as gaining an average of 140% but recommend to investors to only own around 40 to 50 then the average you tout on your web site in meaningless. It only worked if you bought the same amount of every stock every time, every year. Am I making sense and am I right about this?
New letters and stock services simply do not work over time. Taylor has provided an amazing list or reference to the number of stock picking newsletters and the results.

Many years ago when we speculated with individual stocks we too had newsletters. It was a waste of time and money.
John C. Bogle - Two Fund Portfolio: Total Stock & Total Bond. "Simplicity is the master key to financial success." || Buy Total Stock until it hurts. Then find a way to buy even more!

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1789
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Re: Motley Fool,,,am I right about this?

Post by 1789 » Fri Feb 14, 2020 11:31 pm

abuss368 wrote:
Fri Feb 14, 2020 10:36 pm
jhendrix wrote:
Mon Feb 10, 2020 1:57 pm
I have searched and read all of the already posted motley fool topics here at the forum. I have a theory and I know it might be a "no duh genius" moment here but I would like to hear from some of you who are more experienced than myself. Been a subscriber to motley fool for about two years now. Was somewhat excited about the system and over the years have invested a total of about $20,000 with them and have done well. (who hasn't) In the last few months I have decided to kick the fool habit and put all the money back into my 4 fund port. Reason being: they tout the total returns from the beginning of their existance and yes they are unbelievable. But they also, from their podcast and online site, recommend a certain number of stock picks. From my perspective when they tout their "total" return on all their picks then one would have only received the same results if they had invested in ALL of their recommendations. If someone had only invested in the small number they suggest without buying every suggestions they would not have been able to score the same percentage growth they push on their web site. So if they show the total results from all of their suggestions over the years but someone only picked a handful of them then how could anyone expect the same fabulous growth percentages. you would have had to purchase every stock recommend at the same percentage to achieve the goals they tout. So again, If you show results from 150 stocks as gaining an average of 140% but recommend to investors to only own around 40 to 50 then the average you tout on your web site in meaningless. It only worked if you bought the same amount of every stock every time, every year. Am I making sense and am I right about this?
New letters and stock services simply do not work over time. Taylor has provided an amazing list or reference to the number of stock picking newsletters and the results.

Many years ago when we speculated with individual stocks we too had newsletters. It was a waste of time and money.

Well said. People think that they are rational in their decisions but actually they are not. Irregularities dominate stock market and there is no way to pick winners.
"My conscience wants vegetarianism to win over the world. And my subconscious is yearning for a piece of juicy meat. But what do i want?" (Andrei Tarkovsky)

M.Lee
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Re: Motley Fool,,,am I right about this?

Post by M.Lee » Sat Feb 15, 2020 6:06 am

BogleMelon wrote:
Mon Feb 10, 2020 2:04 pm
OP, it is simple, if Motley Fool know which stock is the next Netflix or Amazon, they wouldn't sell you that information. They would keep it to themselves and be billionaires in no time.

Not only that, but if they know which stocks would bring them profits that is equal to or more than the subscription fees for their customers, they again, would keep that information to themselves, and make money by shorting these stocks instead of trying to convince customers to subscribe.
Isn't that true of any advisor service including all the fund managers of Vanguard, Fidelity, et al?

BogleMelon
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Re: Motley Fool,,,am I right about this?

Post by BogleMelon » Sat Feb 15, 2020 9:22 pm

M.Lee wrote:
Sat Feb 15, 2020 6:06 am
BogleMelon wrote:
Mon Feb 10, 2020 2:04 pm
OP, it is simple, if Motley Fool know which stock is the next Netflix or Amazon, they wouldn't sell you that information. They would keep it to themselves and be billionaires in no time.

Not only that, but if they know which stocks would bring them profits that is equal to or more than the subscription fees for their customers, they again, would keep that information to themselves, and make money by shorting these stocks instead of trying to convince customers to subscribe.
Isn't that true of any advisor service including all the fund managers of Vanguard, Fidelity, et al?
Fidelity and Vanguard selling an excellent product: Index funds. They make money by other ways such as idle cash in MM funds, fees on 401K plans...etc.
Also Vanguard structure is very unique. It is owned by its funds, which owned by investors. No or very little conflict of interest here. Completely different model than Motley Fool. On the other hand, MF is just selling "hot stocks tips"! Maybe they sell something else that I am not aware of, but I think this is their main product line.
"One of the funny things about stock market, every time one is buying another is selling, and both think they are astute" - William Feather

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