Fools stock advisor?

[smooth_rough]

Motley Fools site claims its stock advisor flagship service has returned 518% vs SP500 131%.

If that's real why wouldn't somebody be offering a mutual fund based on their stock picks and investing principles with that kind of performance?

[gtd98765]

If that were real, Forbes, Fortune, Money, etc would be writing articles about it constantly.

[JakeyLee]

If that were real, Forbes, Fortune, Money, etc would be writing articles about it constantly.

Oh man… anyone remember “The Dogs of the Dow??”., sure wish I could get that money back, meh.. probably a cheap lesson (?).

[Stinky]

Motley Fools site claims its stock advisor flagship service has returned 518% vs SP500 131%.

If that's real why wouldn't somebody be offering a mutual fund based on their stock picks and investing principles with that kind of performance?

Something like -

Past performance is not a guarantee of future results

[Taylor Larimore]

Motley Fools site claims its stock advisor flagship service has returned 518% vs SP500 131%.

If that's real why wouldn't somebody be offering a mutual fund based on their stock picks and investing principles with that kind of performance?

smooth/rough:

It cannot be realistic. I am sure that it is very misleading advertising for unsuspecting investors. Motley Fools should be ashamed.

Best wishes
Taylor

Michael Edesess and Kwok L. Tsui, authors of The 3 Simple Rules of Investing: "Because misinformation and deceptions are so endemic in the industry, it is difficult for investors to distinguish truths from falsehoods."

[hnd]

I believe they had mutual funds and they stunk so they stopped...i think.

read the fine print on the 500+%. you'll be surprised and what that took.

[dukeblue219]

It's "real" in the sense that they aren't lying, but not useful because it's not an annualized return and they use arithmetic means, not geometric.

As an example, one could select 10 stocks. One gains 900% (now worth 10x original) and the other 9 go out of business. You've gained nothing in dollars, your annualized return is 0%, but the arithmetic mean of one 900% return and nine zeroes is 90%.

The S&P 500 rose 30% over this made up time period. Which would you rather have owned?

[Tom_T]

These people didn't think it was worth it. Don't be a fool (sorry, that was too easy to pass up.)

https://www.bbb.org/us/va/alexandria/pr ... er-reviews

[arcticpineapplecorp.]

Motley Fools site claims its stock advisor flagship service has returned 518% vs SP500 131%.

If that's real why wouldn't somebody be offering a mutual fund based on their stock picks and investing principles with that kind of performance?

you must have missed my post from July (Lying about ouperformance?):

their stock advisor picks I believe is from a newsletter you have to pay/subscribe to. I'm sure there's tons of disclaimers in the newsletter itself saying the investor's return could be different because of a whole host of variables, mostly by the time you place your trade you're too late if the other readers of the newsletter get there first. Or returns might be better from the time the writers post their pick but if you buy the stock weeks later, you'll get different returns. I'm sure there are other disclaimers about this being entertainment and does not constitute investing advice and you should consult a financial advisor, etc.

So in this case (newsletter) I'm not sure they're registered in the same way as an ETF is. If he's thinking of buying Motley Fool ETFs (https://fooletfs.com/) those should be registered by the SEC and I'm sure they don't make promises there, but do show their past performance. A past performance can still look good if you pick the right time period! And never forget, past performance is no guarantee of future results.

here's a post I wrote about the Fools started by nisiprius "Starting a test going forward: Motley Fool versus Index Fund"

I remember when the Gardner brothers used to go on financial tv shows in the 90s wearing those stupid jester hats and claiming that they could easily beat the Dow.

Back then Motley Fool had a few different portfolios with cutesy names which were supposed to outperform, but I think they all collapsed in the wake of the 2000-2002 bear market. The details of those portfolios have mostly been lost to the vagaries of the internet, but I did find this book about one of them: The Foolish Four: How to Crush Your Mutual Funds in 15 Minutes a Year. The idea was to find stocks with high dividend yields but they used backtesting to refine their strategy, so the methodology included inanities like using the square root of the stock price. Even in 1999 this should have been a tip off that the whole strategy was doomed, and Jason Zweig rightly took them down in an article called "False Profits" (and apparently received quite a bit of hate mail).

I can't find any data on how this strategy actually performed, but the Amazon site shows that most of the reviews from the late 1990s were four and five stars, and the reviews from 2000-onwards are one and two stars, so that's probably a clue.

i followed the fools when i started investing (fortunately I didn't take any of their advice except to invest in the S&P500 index fund at Vanguard). That's probably the best advice they've ever given (and don't profit from that which is why they rarely promote that instead promoting their newsletters and stock picks).

regarding the FF (Foolish four) I don't remember anything about square root of the stock price. I remember they took the lowest price AND highest yield of the Dow stocks. Theirs was a "refinement" of the dogs of the dow strategy which chose 10 of the lowest price AND highest yield stocks of the Dow. The fools thought they'd simplify the strategy with similar or better returns owning only 4 Dow stocks each year (and trading them if required). They started telling people to do this type of rebalancing if required (getting rid of those 4 Dow stocks that weren't the lowest price/highest yielding every December)...

Worked for a while I suppose. They published the book you referenced. Then they changed their strategy and told everyone to switch up their 4 Dow stocks in january. Backtesting stopped working using December trades.

why don't they promote the FF anymore?

A Foolish finale
The Foolish Four is no more. (Find out why here)

source: https://www.fool.com/investing/dividend ... -four.aspx

it didn't work anymore.

The lesson the Fools never seem to learn is "If you can't beat 'em, join 'em."

But that's because selling newsletters and books is their bread and butter.

"It's difficult to get a [Fool] to understand something when his salary depends upon his not understanding it" -- Upton Sinclair

here's what I wrote here: viewtopic.php?t=323667

I would never, ever hire an advisor who proudly and openly referred to himself as a fool.

As I recall they distinguished between "Fools" with a capital F and "fools" with a lower case f. The Fool was the wise one, because in Elizabethan times the Fool (or court jester) was the only one who could tell the King the truth without getting his head lobbed off (because he did it in a humorous way). fools, with a lowercase f are those who are not wise...think, people who are poor stock investors as an example. The Gardner bros. are trying to help investors be Fools rather than fools. That's how I remember it. I could be wrong.

For the OP and Motley fool service, read here about the history of the how the motley fools attempts at managing money have done (they used to have a "Million Dollar Portfolio":

viewtopic.php?t=206471#p3168420

How did the Fools' Million Dollar Portfolio turn out?

Due to the overwhelming response, we are no longer enrolling new members in Million Dollar Portfolio at this time.

If you are interested in learning more about Million Dollar Portfolio, please enter your email address below and click the button. We will notify you the moment we begin accepting new members again.

Somehow, I don't imagine the "overwhelming response" was necessarily positive.

They also had to abandon their Foolish Four Portfolio they had touted in the past. After selling many books touting the Foolish Four, that strategy is no longer promoted by the Fools.

See a pattern here?

they're in the advertising/publishing/media business. they make money selling newsletters, etc.

what do you think?

[nedsaid]

In the late 1990's, the Gardner brothers were sort of Wall Street wunderkinds. As I recall, there was a Motley Fool book. I see their articles from time to time, touting a stock and saying that more picks are available if you just subscribe to their newsletter. Don't pay too much attention to them anymore. They are still a thing.

[calmaniac]

Motley Fools site claims its stock advisor flagship service has returned 518% vs SP500 131%.

If that's real why wouldn't somebody be offering a mutual fund based on their stock picks and investing principles with that kind of performance?

If Motley Fool could reproducibly outperform the S&P 500 by 4x, why in the world would they share that information with the greater world and dilute their results? Rather, they would hold that info close and make millions & billions.

In reality, it's much easier for MF to make money by selling subscriptions to the Motley Fool Stock Advisor Flagship service than by outperforming the S&P 500 index.

[In the last 90's I was a MF believer. They talked a good talk and I didn't know better. They have not aged well IMHO.]

[BolderBoy]

Are there any greater fools than the Motley Fools?

[Tom_T]

Are there any greater fools than the Motley Fools?

They became wealthy, so...

[firebirdparts]

My wife got some level of subscription free with some credit card, and so I looked at it for a year. 100% of what I saw was invitations to pay more. It's certainly possible they recommended some portfolio that did way better than mine. Don't know.

[Ocean77]

If that's real why wouldn't somebody be offering a mutual fund based on their stock picks and investing principles with that kind of performance?

I think you answered your own question. If they would offer a mutual fund that invests based on their own advice, then the subscription/fee bonanza for them would end soon, since the actual performance numbers would be out in the open.

[shess]

In the late 1990's, the Gardner brothers were sort of Wall Street wunderkinds. As I recall, there was a Motley Fool book. I see their articles from time to time, touting a stock and saying that more picks are available if you just subscribe to their newsletter. Don't pay too much attention to them anymore. They are still a thing.

For awhile, for me their site filled much the same place in my life as Bogleheads does now, a free place to hang out and chat with a financial slant. I think they had a reasonable amount of semi-sane advice in there - it wasn't necessarily RIGHT, but I think they were heading in a decent direction. Often/mostly it boiled down to making a relatively safe selection and then sitting on it for a year or more, as with Foolish Four, and I'm pretty sure things like Dogs of the Dow got a lot of coverage in their forums. Again, I'm not saying it was RIGHT, but in a world of advisors running things more like a hyped-up square-dance caller, it was at least an improvement on the fees and drag front.

Then they converted everything into a continuous upsell, and there was no point to hanging around.

[Laurizas]

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[bendix]

I cant comment on the validity of any of their claims, but if looking at their website doesnt make every alarm bell you have ring...