The Money Mustache Community
Learning, Sharing, and Teaching => Investor Alley => Topic started by: decessus on May 31, 2015, 11:34:33 PM
-
What do folks think of a subscription to Motley fool? I was intrigued by their $129 for 2 years? pitch, but I wonder:
1) Are their stock picks any good?
2) Is it a waste of $ and better to just focus on index fund investing, especially if you're into early retirement.
-
It's be proven that nobody knows what the market will do long term. Why would you take advice from someone who knows nothing? ;)
-
I have 3 fool subscriptions -- Pro, which includes Options, Stock advisor, and Rule breakers. I enjoy them and most of my available money is in stocks. 401k and other things are limited.
My approach is to have control -- I want to learn and develop skills and have advisors. Pro is my home service, it is conservative and the people that run it are great.
Stock advisor is an idea service. They are going to throw many ideas at you and you need to discern what companies meet your goals.
I also listen to Jim Cramers podcast, I read Joshua Kennons blog and I enjoy Sauls investing discussions free board at the Fool.
A SA subscription is cheap. The question is whether you are into individual stocks. There are many very successful people at the fool community, but some people will go at it like gambling and become very dissatisfied.
-
Some of their picks are great and others not so much. The market is fascinating and I love learning about businesses. You also have to develop your investing goals and style. It takes time to figure out what you like best and what works for you. Indexes are set and forget. Stocks need to be monitored, quarterly. Fool will help with earnings reviews.
-
I don't think they pay their analysts very well - at least on the Canadian site.
They were touting Bombardier as their secret super stock pick of 2015, because the Paris air show will be a big break for their new 737 competitor.
This was published a week after Bombardier admitted the plane wouldn't be ready to go to Paris.
-
It is a waste of money. Don't ask me though, let's see what Motley Fool has to say about index investing:
It's be proven that nobody knows what the market will do long term. Why would you take advice from someone who knows nothing? ;)
It's worse than just taking advice, you're paying for the advice from someone who knows nothing.
-
There's a great section in an old Frontline documentary from about 1998 about how Fools lost an insane amount of money betting on Internet stocks that had been overhyped on their service.
I don't visit their site much, but occasionally click through on articles. Their ads and other things that try to entice you to sign up for their services look like total clickbait scams to me--like those "one weird trick" ads.
-
Imo the free section mostly sucks and the ads are pushy. And on the paid side you still need to use your brain and accept the risk and responsibility for your money.
-
I subscribed to Motley Fool back in 2004 - 2006. I bought maybe 15 stocks. Two did really well. One has appreciated 10 times. This one stock made the whole gambit successful. I recently did a 30 day free trial on MF's Hidden Gems (small cap stocks) to see what their recommendations were for the stocks that I still hold, and to see if I wanted to get back into individual investing. I discovered that after I cancelled my subscription, they issued a sell recommendation for that one stock that went up 10 times. Most of the gain occurred after their sell recommendation. They broke their own rule of hold, hold, hold. Even so, I may take a 30 day free trial of the Stock Advisor.
-
Listen to their podcasts for free and see if you like the way they look at the market. They also mention a lot of their recommendations on their podcasts.
-
Some of the winners I've got from the Fool: ambarella, skyworks, Apple, papa johns.... Most of my stocks are doing well. I also keep an eye on them.
-
To benefit by picking individual stocks, you will be investing your time. Remember that your time could also be spent earning money, so there is an opportunity cost.
If you are going to spend your time on stock picking (ineffective for most people who are not Warrren Buffett...Buffet recommends indexing...), consider the strategy of using it in a cost-efficient way. For that, try following suggestion of the poster before last!
Bonus technique: network with other individual stock pickers, find one with a Fool subscription, trade recommends with them for free.
Last comment on individual stock picking: To do it successfully, you have to go against the crowd. Motley Fool is part of the crowd. You'd be paying money to stand on sinking ground, in a sense.
I've done other deals where I paid for aggressively marketed "expertise." Rarely worthwhile in my experience. You'd be better off borrowing investment books from a library, and applying the principles yourself. You'll develop your skills faster too.
-
I'm a big fan of the Motley Fool forums and think many of the articles on their website are well-researched (though content quality varies widely). Around 16 years ago I even stopped by their offices in Old Town Alexandria to briefly chat with David and Tom Gardner.
However, I wouldn't ever consider acting on TMF's financial advice (except to invest in index funds), much less pay for the service. Worse, if you subscribe to their service you're more likely to get caught up in the day-to-day market fluctuations -- which is exactly what you're trying to avoid with investing.
I used to subscribe to the (now moribund) Outstanding Investor's Digest. It's main value was to convince me how much effort successful money managers had to work to generate above average market returns.
-
I routinely read the MF articles about the mega-corp I was previously employed by.
Bottom line, they have some people who are good at writing, but not at understanding the companies they covered. The writers didn't understand the actual economics of the business, the nature of competition, or drivers of growth.
To be fair, I worked in an industry that thrived on obscurity of pricing and deals. But that doesn't make the analysis any better.
-
If you view it as a tuition to learn a few things, then it may be worth it. If your expectation is to sign up as a complete noob and make a bunch of money, you'll most likely be disappointed. Subscription services can only work if you already have a methodology, and are just looking for additional people to get ideas from. You will never make money (apart from mostly luck) trying to follow someone else's method. It has to be your own.
-
You will never make money (apart from mostly luck) trying to follow someone else's method. It has to be your own.
Why?
Millions of people have made lots of money without luck by following pretty basic index investment strategies.
-
I think that they are more journalist and not analysts. The always poke fun at CNBC and then create a ton of content that is pretty much the same as CNBC.
-
Some of the winners I've got from the Fool: ambarella, skyworks, Apple, papa johns.... Most of my stocks are doing well. I also keep an eye on them.
Almost all stocks have done really well the past 6 years or so.
-
Way to generalize. My swks shares doubled in under 1 year. Amba is up over 200% in two years. This is above average performance.
-
I got a subscription to Stock Advisor due to the recommendation of a family member and wanting to learn more about investing after ditching my financial advisor. As others have said, it can help you form your investing strategy and understand methods for evaluating companies, but ultimately after further research I shifted to indexing almost exclusively. The biggest downside other than cost is they spam the living daylights out of you once you sign up for an account...like completely outrageous amounts of spam even with editing your communication settings. Yes, they have picked some "winners" and their share of duds (hello The Container Store), but it really comes down to active vs passive investing. There isn't much difference IMO between paying an expense ratio to a portfolio manager of an actively managed mutual fund versus paying money to a subscription to Motley Fool and just following their advise. Sure, economies of scale come into play at a certain point, but after reading A Random Walk, MMM, Jim Collins Stock series and researching the abysmal performance of active mutual funds, I decided indexing is the way to go. Better to focus on what you control....asset allocation and cost. Let the market do what it's gonna do and sleep well
-
I prefer Stansberry and Associates. For their content and not their over the top dedication to Ayn Randian Libertarianism (Alternately, the Fool will proselytize with mostly left wing propaganda). The Doc Efrig letters are especially good for FIRE as they are conservative and income centric. The Palm Beach Research Group also has some good conservative products but I wouldn't recommend getting both unless you are just a stock analysis junkie; you'll have information overload. I canceled all Motley Fool products after the "Sierra Wireless" advertisement. They went completely overboard, essentially *promising* an 86 bagger and touted it as "the only stock you will ever need to own", clearly against their usual promotion of diversification. I have questioned their commitment to ethics ever since. They lost many subscribers over the flap but have steadfastly refused to issue an apology.
Both MF and S&A will hit your email frequently with pitches to buy more of their products. It is a little annoying. The main difference to me is I've never seen the S&A marketing violate the company's own stated principles like with the Sierra Wireless ad. I still use the CAPS game at MF and continue to enjoy the writing of Morgan Housel.
-
Great, thanks for all the input on Motley Fool. I have noticed so many emails from them, I was a bit turned off. I think I plan to stick with index funds. It just makes sense as a strategy for me as I am not up for following lots of individual stocks.
-
I think it would not be completely indefensible to subscribe to one of the newsletters, even though I personally have never done so and do not plan on ever doing so. But on the other hand, as I recently remarked on Twitter, their recent landing pages trumpeted their stock picks in Fossil and Lumber Liquidators. They really need to update those, as it makes them look ridiculous (even though in fact even good services will pick bad stocks among good ones - it's just funny that of the few stocks they picked as successes, there were some that failed immediately thereafter).
-
I have thought about doing that. I love their tweets and run into their stuff doing online searches a lot. I just don't want to dish out money I could be investing due to smaller capital. I end up reading the free version of Seeking Alpha, read Joshua, watch Cramer, and read (or more like listen to) books. the next will be One Up on Wallstreet.
Today was a really good day 1.32% in my Robinhood account-- Scottrade was even better. I track every day and log it. Some think Im a fool for doing it, but I think of it as scientific observation.
-
I'll mention that sauls investing discussions is a fantastic sub forum on the free portion of the Fool, if you are into stocks and like analysis. His personal returns are phenomenal and the board attracts a bunch of very smart people.
-
The Motley Fool forums were always good. The paid analysis... not so much.
-
I highly recommend the Motley Fool. I follow their advice pretty much to the letter - and I've been tracking my performance compared to investing it all in the S&P 500 with all dividends reinvested since 2007 (before the financial crisis) I've been investing much longer than that but brokerage statements only go back so far.
The results of this is that I've outperformed the "market" by over 50% total over that period. Basically I have outperformed by about 5% per year. That's a big deal. I'm no genius, I'm just playing a different game than the wall street folks.
I have some index investments in my 401K but other than that I'm all individual stocks.
The studies that show that "active managers" don't outperform don't apply to individual investors in my humble opinion. It's blindingly obvious, that on average the performance of an investment is only going to be as good as the overall performance, minus fees, of the market. A lot of ink has been spilled proclaiming the obvious. That being said, I believe that the individual has many advantages over the institutional investors.
1: We don't have to compete with anyone else for quarterly performance. We can hold on as long as we want. Time frame is the biggest advantage.
2: Invest in businesses not names or charts or whatever. Buy excellent companies and hold on to them for a long time.
3: We can control our own behavior. I didn't sell out in March 2009 in fact I was buying all the way down and back up. Mutual fund managers don't get to stop people from panic selling - and are forced to liquidate good stocks at the worst time, and forced to buy after a huge upswing, too.
4: My small purchases aren't going to move the market. And since I hold for a long time, even if I did get a few pennies shaved off for trading friction and such, who cares?
5: Even index funds have ongoing costs. An $8 commission on a $6000 investment that I held for 14 years has less than 0.01% annual expense ratio. And now the stock is worth $260K
Now, the average individual investor buys high and sells low, panics at the worst possible times, chases performance, jumps on the latest hot stock, and basically is his own worst enemy. I'm interested in capturing the results of that bad behavior for myself.
If you can control your behavior and avoid these mistakes for the most part (nobody is perfect) then I think that beating the market is pretty easy.
Index investing is fine. Know yourself and if you can't behave properly then just set it and forget it. Otherwise it's worth the effort.
50% more dollars in my account says that this is true.
-
I highly recommend the Motley Fool. I follow their advice pretty much to the letter - and I've been tracking my performance compared to investing it all in the S&P 500 with all dividends reinvested since 2007 (before the financial crisis) I've been investing much longer than that but brokerage statements only go back so far.
The results of this is that I've outperformed the "market" by over 50% total over that period. Basically I have outperformed by about 5% per year. That's a big deal. I'm no genius, I'm just playing a different game than the wall street folks.
I have some index investments in my 401K but other than that I'm all individual stocks.
The studies that show that "active managers" don't outperform don't apply to individual investors in my humble opinion. It's blindingly obvious, that on average the performance of an investment is only going to be as good as the overall performance, minus fees, of the market. A lot of ink has been spilled proclaiming the obvious. That being said, I believe that the individual has many advantages over the institutional investors.
1: We don't have to compete with anyone else for quarterly performance. We can hold on as long as we want. Time frame is the biggest advantage.
2: Invest in businesses not names or charts or whatever. Buy excellent companies and hold on to them for a long time.
3: We can control our own behavior. I didn't sell out in March 2009 in fact I was buying all the way down and back up. Mutual fund managers don't get to stop people from panic selling - and are forced to liquidate good stocks at the worst time, and forced to buy after a huge upswing, too.
4: My small purchases aren't going to move the market. And since I hold for a long time, even if I did get a few pennies shaved off for trading friction and such, who cares?
5: Even index funds have ongoing costs. An $8 commission on a $6000 investment that I held for 14 years has less than 0.01% annual expense ratio. And now the stock is worth $260K
Now, the average individual investor buys high and sells low, panics at the worst possible times, chases performance, jumps on the latest hot stock, and basically is his own worst enemy. I'm interested in capturing the results of that bad behavior for myself.
If you can control your behavior and avoid these mistakes for the most part (nobody is perfect) then I think that beating the market is pretty easy.
Index investing is fine. Know yourself and if you can't behave properly then just set it and forget it. Otherwise it's worth the effort.
50% more dollars in my account says that this is true.
You made my day! If only we could all be like you!
-
I've never used their paid services, but I read a number of their articles.
I previously worked at a big MegaCorp, and I got to see all the financials and internal analysis of the business before earnings. Then I would occasionally read the Motley articles on what they thought of my company.
Bottom line, Motley articles were full of it. They didn't understand our business at all. In once case their "analysis" of our unit economics was off 100:1. This is something simple arithmetic applied to publicly available numbers would have caught.
Their overall buy/sell recommendation happened to be right, but they called it for all the wrong reasons.
I'd skip it.
-
You made my day! If only we could all be like you!
I know that was meant to be sarcastic, but really, why can't you?
-
To benefit by picking individual stocks, you will be investing your time. Remember that your time could also be spent earning money, so there is an opportunity cost.
This is something I'm coming to the realisation of. I started investing a few years ago and subscribed to MF due to their "how to start investing" articles (way before MMM). I found them great at exciting me about the possibilities of investing, and also introduced me to concepts like asset allocation (which lead me to William Bernstein's book, and then to the Bogleheads). Anyway, I'm realising that the amount of time I spend researching and worrying about individual companies is keeping me from expanding my horizons in other ways e.g. new fun hobbies, or new job-related learning, so I've begun the switch over to index funds.
-
I've never used their paid services, but I read a number of their articles.
I previously worked at a big MegaCorp, and I got to see all the financials and internal analysis of the business before earnings. Then I would occasionally read the Motley articles on what they thought of my company.
Bottom line, Motley articles were full of it. They didn't understand our business at all. In once case their "analysis" of our unit economics was off 100:1. This is something simple arithmetic applied to publicly available numbers would have caught.
Their overall buy/sell recommendation happened to be right, but they called it for all the wrong reasons.
I'd skip it.
Very interesting. Did you read anyone who DID get it right, in your opinion? Sell-side research? Buy-side theses? Individual investors?
-
I've never used their paid services, but I read a number of their articles.
I previously worked at a big MegaCorp, and I got to see all the financials and internal analysis of the business before earnings. Then I would occasionally read the Motley articles on what they thought of my company.
Bottom line, Motley articles were full of it. They didn't understand our business at all. In once case their "analysis" of our unit economics was off 100:1. This is something simple arithmetic applied to publicly available numbers would have caught.
Their overall buy/sell recommendation happened to be right, but they called it for all the wrong reasons.
I'd skip it.
Very interesting. Did you read anyone who DID get it right, in your opinion? Sell-side research? Buy-side theses? Individual investors?
The type of institution research came from didn't seem to be relevant. It was an obscure industry. Most sell side research got it wrong. I never saw buy-side stuff. There was one guy on SeekingAlpha that clearly knew the industry, and one or two (of over a dozen) sell-side analysts that seemed to get it.
The challenge is that the stuff from the people who clearly didn't get it was written just as well as the stuff written by those who did.
Of course, everyone rightly had a "buy" recommendation on us at the time, so it's not like it made a lick of difference.
-
no one else wants it just for reading material?
I do like to read stock articles because I like to see how other people view it... then I go back to indexing myself...
It's nothing more than a magazine subscription like Nat Geo or nature or whatever your choice is to me.
-
Way to generalize. My swks shares doubled in under 1 year. Amba is up over 200% in two years. This is above average performance.
Maybe by a little bit. The market as a whole is up over 300% in five years. And I got that performance without paying for anyone's advice.
-
Before I discovered MMM I was an individual investor and purchased a 3-year Stock Advisor membership for $50. It wasn't terrible advice, but some of their picks did spectacularly poorly (NOV is one I distinctly remember). It's not great for beginners because a lot of the stocks they recommend are very highly-priced (e.g. Priceline @ $1,300/share). Overall it's not worth it, but at $16.67/year I'm not crying over the spilled milk.
I did get some value out of their Options service, of which I was offered a free preview/mini-report. I know a lot of people on here are against any kind of individual picking, but you can make some beer money pretty easily with just a little knowledge of options trading. Covered calls and synthetic longs are pretty safe if you pick just about any blue-chip stock (e.g. Apple, Google, Disney, etc.).
-
2: Invest in businesses not names or charts or whatever. Buy excellent companies and hold on to them for a long time.
Pray tell; how do I tell what will be an excellent company in the future (20+ years from now) from one that will merely be great one, or an average or poor one?
I do believe IBM, GM, and blackberry were all considered excellent companies at one point..
Your advice makes sense, as long as you can tell the future. Just a minor problem..
-
Way to generalize. My swks shares doubled in under 1 year. Amba is up over 200% in two years. This is above average performance.
Maybe by a little bit. The market as a whole is up over 300% in five years. And I got that performance without paying for anyone's advice.
Splitting hairs here but if you had a magic ball and bought on March 4, 2009 (the very bottom), VTSMX is up a total of 245% including dividends as of the close yesterday.
-
2: Invest in businesses not names or charts or whatever. Buy excellent companies and hold on to them for a long time.
Pray tell; how do I tell what will be an excellent company in the future (20+ years from now) from one that will merely be great one, or an average or poor one?
I do believe IBM, GM, and blackberry were all considered excellent companies at one point..
Your advice makes sense, as long as you can tell the future. Just a minor problem..
Just saw this today and was looking for an excuse to post it on this forum. I guess this thread is as good as any.
This is the return of every individual stock in the US from 1983 to 2006. You have to make sure you picked the top 25% of stocks, otherwise your return over that time period was 0%. That means you had a 75% chance of picking a stock that underperformed the market. Let's hope your method (and Motley Fools method) gets you in the right 25%!
(http://s8.postimg.org/yaz8cm211/Stock_Returns.jpg)
Taken from this paper: http://michaelcovel.com/pdfs/TrendingStocksDriveTheMarket.pdf
-
I've never used their paid services, but I read a number of their articles.
I previously worked at a big MegaCorp, and I got to see all the financials and internal analysis of the business before earnings. Then I would occasionally read the Motley articles on what they thought of my company.
Bottom line, Motley articles were full of it. They didn't understand our business at all. In once case their "analysis" of our unit economics was off 100:1. This is something simple arithmetic applied to publicly available numbers would have caught.
Their overall buy/sell recommendation happened to be right, but they called it for all the wrong reasons.
I'd skip it.
Very interesting. Did you read anyone who DID get it right, in your opinion? Sell-side research? Buy-side theses? Individual investors?
The type of institution research came from didn't seem to be relevant. It was an obscure industry. Most sell side research got it wrong. I never saw buy-side stuff. There was one guy on SeekingAlpha that clearly knew the industry, and one or two (of over a dozen) sell-side analysts that seemed to get it.
The challenge is that the stuff from the people who clearly didn't get it was written just as well as the stuff written by those who did.
Of course, everyone rightly had a "buy" recommendation on us at the time, so it's not like it made a lick of difference.
Thanks - very interesting.
-
2: Invest in businesses not names or charts or whatever. Buy excellent companies and hold on to them for a long time.
Pray tell; how do I tell what will be an excellent company in the future (20+ years from now) from one that will merely be great one, or an average or poor one?
I do believe IBM, GM, and blackberry were all considered excellent companies at one point..
Your advice makes sense, as long as you can tell the future. Just a minor problem..
I've been investing this way for a long time. Sure, some companies go nowhere or drop a lot, but it only takes a few major winners to make up for a lot of losers. I've been investing with the Motley Fool for a long time and I think my results speak for themselves (~50% outperformance over SP500 including dividends since Jan 2007). They are a good service. You may not have the interest or time to dig in to individual companies and index investing is awesome in that case. I generally tell my friends to put their money in VTSAX, unless they really want to spend some time.
On my own, I'm a terrible stock picker, though I have made a couple good calls along with the very bad. By paying for advice from the Fools, I've improved my batting average significantly.
As I tried to point out, the majority of active investors behave poorly and pay dearly by underperforming the indexes significantly. It is my belief that by understanding what makes for good behavior as an investor and practicing it (not easy by any means) it's possible to capture that difference. That money end up in someone's pockets. It might as well be mine.
-
I'm a fan of Morningstar. I like that they are less focused on finding "hidden gems" (which sounds like watercooler talk) and more on evaluating established businesses. When I invest in individual stocks I want to know: is the price justified by their cash flow? Do they have consistently high return on invested capital? And do they have a moat (an intangible competitive edge)? They're pretty good about breaking down a company in these terms, calculating intrinsic value, and evaluating uncertainty.
-
Your advice makes sense, as long as you can tell the future. Just a minor problem..
Hi. I just wanted to add a comment here. We are all trying to predict the future, even if we only invest in index funds. It's just a matter of degree. You are selecting some subset of assets (unless you somehow buy an equally weighted fund of the entire world, which I suppose is possible) and so am I. Even so, we are likely betting based on some track record of how things have done in the past, that our returns in the future will be enough to maintain our financial independence.
Assuming that I randomly chose 20 or 30 stocks from the entire world, both of us would have the same statistical return, but mine would have a higher potential variability.
I would maintain that making mistakes is a part of investing, so individual examples of companies that have done poorly is not really evidence. I could add as many or more that have done excellently. As long as I have a few companies in the right side of the graph it makes up for a bunch of things down on the left. A stock can only go down 100% but can increase by many times more than that. It only takes 1 4000% return to make up for a lot of losers.
-
I was a big fan of MF back in their early days, when they were all about teaching you how to do your own analysis and make fundamentally sound picks. I've never entirely forgiven them for reversing their stance and now making their bread and butter selling a service they used to swear was unnecessary.
I actually fell for the SA subscription one time, and I found some interesting ideas in it, but I didn't end up doing anything with those ideas. Will never do it again.
-
2: Invest in businesses not names or charts or whatever. Buy excellent companies and hold on to them for a long time.
Pray tell; how do I tell what will be an excellent company in the future (20+ years from now) from one that will merely be great one, or an average or poor one?
I do believe IBM, GM, and blackberry were all considered excellent companies at one point..
Your advice makes sense, as long as you can tell the future. Just a minor problem..
It's called research and analysis. ;)
BTW, if I haven't said it already, Saul's Investing Discussions is one of the best boards on MF's free forums.
-
Your advice makes sense, as long as you can tell the future. Just a minor problem..
Assuming that I randomly chose 20 or 30 stocks from the entire world, both of us would have the same statistical return, but mine would have a higher potential variability.
Ok, so you acknowledge the (correct) point that statistically we will both have the average return, whether buying one stock or 10,000. But the volatility of one (or 20) stocks will be orders of magnitude higher. Just this simple fact convince me that owning single stocks is pointless. Statistically you get the same return, but higher risk and volatility. Why bother?
It's called research and analysis. ;)
BTW, if I haven't said it already, Saul's Investing Discussions is one of the best boards on MF's free forums.
Not exactly helpful. But ok; tell me then what kind of research and analysis would tell you that Apple would invent the ipod and iPhone? And that people would ditch their blackberries for them?
Or that BP would suffer the Deepwater horizon disaster? Or that oil prices would collapse?
How could you tell that toyota would take over the market in US?
Or that the government would rescue goldman but not Lehman brothers?
Or that amazon would do great with a decade of losses to go from a bookstore to ...whatever it is now?
There are a million other examples. It just doesn't make much sense to me to look at how much profit they made last quarter to predict a whole lot about the future. Business (and especially stock) success and failure is largely driven by surprises, unforeseen events, government action/inaction, political or weather events etc. The balance sheet tells you nothing about this.
-
Your advice makes sense, as long as you can tell the future. Just a minor problem..
Assuming that I randomly chose 20 or 30 stocks from the entire world, both of us would have the same statistical return, but mine would have a higher potential variability.
Ok, so you acknowledge the (correct) point that statistically we will both have the average return, whether buying one stock or 10,000. But the volatility of one (or 20) stocks will be orders of magnitude higher. Just this simple fact convince me that owning single stocks is pointless. Statistically you get the same return, but higher risk and volatility. Why bother?
Ahh, I was making a point that if I wasn't able to make any good decisions we would have the same return. But I believe that once you look past the next quarter and don't try to follow the herd and remove the other constraints that make it hard for professional wall street money managers to outperform the market over time, you can make lots more money buy buying and holding good companies for the long term over and above just buying an index.
I've done it now for many years. I have documented returns of ~50% above the S&P 500 with dividends since 2007. The analysts at the Motley Fool have demonstrated this themselves too over the years.
I don't really care, index investing is easy and you will get above average returns over your life assuming that you conquer the behavioral biases that hurt most investors. I'm just saying that it's possible to do much better if you have the right sources of information and good coaching.
-
[
It's called research and analysis. ;)
BTW, if I haven't said it already, Saul's Investing Discussions is one of the best boards on MF's free forums.
Not exactly helpful. But ok; tell me then what kind of research and analysis would tell you that Apple would invent the ipod and iPhone? And that people would ditch their blackberries for them?
Or that BP would suffer the Deepwater horizon disaster? Or that oil prices would collapse?
How could you tell that toyota would take over the market in US?
Or that the government would rescue goldman but not Lehman brothers?
Or that amazon would do great with a decade of losses to go from a bookstore to ...whatever it is now?
There are a million other examples. It just doesn't make much sense to me to look at how much profit they made last quarter to predict a whole lot about the future. Business (and especially stock) success and failure is largely driven by surprises, unforeseen events, government action/inaction, political or weather events etc. The balance sheet tells you nothing about this.
Right, random events would statistically hit all companies equally if they are truly random events, no? Therefore, they have no overall impact on returns. All the companies in the index are subject to the same random events.
So, the research to pick good long term winners is still valuable. Some of those will perform terribly others will perform amazingly and some will just perform OK.
The beauty of this is that the bad performers can only lose 100%, while winners can gain many times that. You only need to slightly bias your portfolio toward the winners to outperform.
Oh, and diversify. Not too much, but you want a good 20-30 companies in your port. Now, it's probably hard to follow that many companies by yourself, which is why I pay for help from people with a long track record of picking winners over time. Not 100% of the time, for sure.
If you are actually interested in the kind of research that leads to outperforming over time, I suggest listening to David Gardner's Rule Breaker investing podcast. He's one of the co-founders of the Motley Fool and has an amazing track record including a greater than 100 times return on his investment in Amazon. http://www.fool.com/podcasts/category/rule-breaker-investing/
-
Right, random events would statistically hit all companies equally if they are truly random events, no? Therefore, they have no overall impact on returns. All the companies in the index are subject to the same random events.
So, the research to pick good long term winners is still valuable. Some of those will perform terribly others will perform amazingly and some will just perform OK.
The beauty of this is that the bad performers can only lose 100%, while winners can gain many times that. You only need to slightly bias your portfolio toward the winners to outperform.
Oh, and diversify. Not too much, but you want a good 20-30 companies in your port. Now, it's probably hard to follow that many companies by yourself, which is why I pay for help from people with a long track record of picking winners over time. Not 100% of the time, for sure.
If you are actually interested in the kind of research that leads to outperforming over time, I suggest listening to David Gardner's Rule Breaker investing podcast. He's one of the co-founders of the Motley Fool and has an amazing track record including a greater than 100 times return on his investment in Amazon. http://www.fool.com/podcasts/category/rule-breaker-investing/
You have your ideas and we'll never agree. But maybe for the benefit of others..
No, the success of the ipod mainly affected Apple. Deepwater horizon mainly affected BP, etc. The unknown unknowns can't be seen in financial reports. And anyone can access those anyway, so what good does it do? Sometimes it will wipe out an industry (buggy whips..), or do the opposite. Yes if you own the total market the random events will even out, but you don't with individual stocks (if you do you've just made your own VTSAX).
As someone showed further up; 90% of the market performance came from 25% of stocks. So buying a stock you have a 75% chance of underperforming. If you think you can beat those odds and get "enough" great performers than good luck.
I did listen to a motley fool podcast a few times years ago, after a while mainly to laugh at it. Remember mostly they talked about earnings and pontificated on whether they would do better or worse. "I think Coke will increase sale of cola, because.. reasons." Or there could be a soda ban and they won't. Not all that useful.
But I have no interest in listen to all that now. If you hear of just one stock they mention that will go 10x in the next few years could you post it here and we'll have a record of it? I'll quote the post so you can't edit it;)
-
I've been outperforming for too long to go back to indexing. Be open to the possibility that there might be some better ways to invest out there. I could certainly be full of crap, but I've done well investing this way and just want to help others do well. Just because the current meme is that indexing is the be all and end all of investing doesn't make it so.
I'm sure I'm not going to convince you, but perhaps for the benefit of others. ;-)
I'm not giving you a stock pick. It doesn't work that way - I don't know what's going to go up 10X in the future. That's why you do your research and spread your bets. You seem obsessed with the fact that a single stock pick can go badly. I get it, pain of losses generally outweighs joy of gains, when in fact gains can be essentially unlimited and cancel out losses which are limited by their nature over time. My worst stock investment definitely went to ZERO. But my best one has made me many times more than that and more than made up for that one.
You claim that I have a 75% chance of my picks underperforming. Random chance may say that. However, while looking at my portfolio, I have 58% of them outperforming, some by a lot. The vast majority of my invested capital is on that side of the scorecard since I tend to add to my winners over time.
Like I said before index investing is great if you don't want to spend a lot of time on your investments. I've decided that the outperformance is worth the time and I like learning about companies and investing.
In reality, most of the reason that people do poorly in investing is their behavior - poor timing, panic selling, chasing performance, etc. None of this changes if you choose index funds or stocks or anything else. How many people sold everything in 2009 and are still sitting around waiting for a pullback to get back in while they missed out on the greatest rally they likely will ever see in their lives? I personally know many of these people.
I'm not paid by the Motley Fool, and don't stand to gain in any way from what I've been saying on these boards. I'm just a satisfied customer.
The odds of me being ridiculed for my unorthodox opinion is high, here in the high church of the index fund. That's OK, I don't mind. We Mustachians should be questioning the conventional wisdom where we find it.
-
I love how we've now gone full circle and index funds are now the "conventional wisdom" that should be questioned1 Bogle must be proud!
Contrary to your statement, I don't use index funds because I'm lazy and don't want to bother analyzing stocks. I do it because I believe that even if I did spend that time I would be worse off.
-
Yeah, see what I did there....
That's cool. I obviously feel differently and have personal evidence that the time and effort can be worthwhile.
-
Would be better to start with library subscription to value line and morningstar.
-
Would be better to start with library subscription to value line and morningstar.
I've heard good things about value line. Have you used it?
-
But I have no interest in listen to all that now. If you hear of just one stock they mention that will go 10x in the next few years could you post it here and we'll have a record of it? I'll quote the post so you can't edit it;)
Why is your criteria 10x in the next few years? That is extremely aggressive. Pick a more reasonable target and maybe we'll play. What do you expect your index funds to do in the next 3 years?
-
But I have no interest in listen to all that now. If you hear of just one stock they mention that will go 10x in the next few years could you post it here and we'll have a record of it? I'll quote the post so you can't edit it;)
Why is your criteria 10x in the next few years? That is extremely aggressive. Pick a more reasonable target and maybe we'll play. What do you expect your index funds to do in the next 3 years?
well:
1) Because the MF guy brag about his 100x return on amazon, I would think "just" 10x would be a step down!
2) Because if I'm going from diversification of 10,000 stocks to 1 stock, I'd want to much better return. Outperforming by 1-2% per year is not enough for me for all that extra risk.
But ok, I'll make it easier; give me one stock that will do 5x in the next 5 years. Write it down here, I'll quote the post and we can go back and check in 5 years. Easy-peasy.
-
That's unrealistic. A one stock portfolio is not investing, it is gambling. It has a massive disadvantage because there is no diversity. No one would ever recommend a one stock portfolio.
If you have a portfolio of stocks, and one of them is a star, then in retrospect you can look back and say, what a great performance.
I think it would be reasonable to offer you a handful of stocks, and then we can look back at those in a few years. You know that makes the challenge more reasonable AND more realistic for what an individual investor really does.
-
That's unrealistic. A one stock portfolio is not investing, it is gambling. It has a massive disadvantage because there is no diversity. No one would ever recommend a one stock portfolio.
If you have a portfolio of stocks, and one of them is a star, then in retrospect you can look back and say, what a great performance.
I think it would be reasonable to offer you a handful of stocks, and then we can look back at those in a few years. You know that makes the challenge more reasonable AND more realistic for what an individual investor really does.
How is that unrealistic? I MF is selling a service that will tell you stocks that will outperform then it shouldn't matter whether it's one or eight of them. The guy said he predicted amazon would grow insanely, give me just one other stock that will do the same in the next 5, or even 10, years. I'd think this would be piece of cake??
I didn't think anyone would take up this stupid "challenge" so didn't bother to lay out the rules. But I guess now we'd have to define what it is MF is selling. I'm to lazy to check their site myself though. But it it:
- Stocks that will outperform if you buy any one of them?
Or
- Portfolio of stocks that will outperform if you buy all of them. How often do you buy, immediately? In what weighting? Do you rebalance? When do you sell?
-
Hey Scanduim. Are you being deliberately obtuse here?
Kbecks2 and I are stating that a properly constructed, diversified stock portfolio can outperform the indices.
We both have done so ourselves. You would probably say that was random chance, we say otherwise.
We've both paid the Motley Fool for advice. We never said that they were all knowing or all seeing. All we are saying is that we've been able to tip the odds in our favor by using their service, that they have a public track record of outperformance.
In addition, I maintain that the studies that show active investing underperforming indexing are obvious, and assume constraints that don't necessarily apply to the individual investor. The biggest component of this is behavior, but there are lots of other factors that these studies ignore, by their nature.
Why all the screed and anger?
-
I'm not particularly angry, and I didn't think I did any screeding. But ok.
The "studies showing underperformance don't apply to me" has been argued here a lot, and I really have no interest in revisiting it.
So it's option 2 then. You need to buy the whole portfolio they're selling. Then I'm curious about my other questions. How does it work? Do they recommend one stock a month and you have to buy that? Do you buy each to maintain equal weight? And do you rebalance as they go up/down? Otherwise it sounds like this would make you buy more and more (in $) each time as the older stocks in your portfolio are going up.
-
Hi Scandium,
The Motley Fool can work any way you want it to, and they have multiple services to choose from. Most services are recommendation services, meaning that they will suggest stocks, and then it is up to you to review and decide if you are interested and want to purchase shares of those companies. (It is easy to make mistakes with those recommendations, and some of those recs turn out to be dogs) If you pay more for a portfolio service, there will be specific recommendations on what to own, but of course, these are their suggestions. I belong to a portfolio service, and I choose to only buy about half of what is suggested, I buy the ones I like and that I understand the most.
There are no guarantees, of course!! The benefits I appreciate are hanging out with smart people who are into stock investing. Like I said, check out Saul's board, for free! He is excellent at picking out high growth companies. (High growth is not the only way I invest, but he's smart and very fun to hang with, and I'm going with a couple of his favorites as a part of my port, and those companies are doing great!) It is very possible to lose money, and anyone who invests *will* make mistakes. Getting burned is how you learn (if you are smart enough to learn). As Paul said, many times the problem is you and your behavior and your emotions.
Successful stock investing takes time and interest. Many people view it as a game, as much fun to build wealth as it is to play a video game. And all investing takes work and practice. Real estate investors can build wealth or they can also lose.
So, it's not appropriate to say - show me the magic pill, because there isn't one! But there are plenty of successful, profitable companies that are growing and have very interesting businesses that you might want to benefit from partial ownership of.
I could beat the S&P 500 if I pick a few stocks that are in the top half of the companies in that cohort, and if I don't get stupid with trading. I enjoy the learning and the process. Putting your investments on autopilot is fine too. Whatever works!
-
I'm not particularly angry, and I didn't think I did any screeding. But ok.
The "studies showing underperformance don't apply to me" has been argued here a lot, and I really have no interest in revisiting it.
So it's option 2 then. You need to buy the whole portfolio they're selling. Then I'm curious about my other questions. How does it work? Do they recommend one stock a month and you have to buy that? Do you buy each to maintain equal weight? And do you rebalance as they go up/down? Otherwise it sounds like this would make you buy more and more (in $) each time as the older stocks in your portfolio are going up.
I mostly follow a couple of their portfolio services that give specific recommendations of when to buy and sell and provide allocation advice. One service, Pro, is conservative and steady. They buy companies that have long track records of growth and large business moats. Companies like Apple and Master Card and also smaller more high-growth businesses. They also do some more "sophisticated" strategies like hedging and shorting and options for income, which you can take or leave, but I find fascinating and profitable.
My total "expense ratio" for my membership is about 0.1% which is pretty good in my mind considering how well it's done and also the education I got. Hopefully over time that will drop, since I continue to profit from my investments and the fees are flat, not tied to my account balance or anything.
These guys are long term, business focused investors. There's no get rich quick or trading on news or momentum here. They believe in buying businesses, not "names" or whatever.
I like the service. Your mileage may vary...
-
The evidence on stock picking newsletters could not be clearer. They perform worse than random. And this is before you even count the increased expense ratio that most subscribers don't include when it comes to the cost of the subscription and the increased trading costs....
as an example here is an article on the motley fool from last october,:
http://www.wsj.com/articles/SB10001424127887323997004578642030536573020
and here is the subsequent performance of their touted stock picks: (4 picks underperform the S and P and 2 out perform.)
http://stockcharts.com/freecharts/perf.php?HAL,YHOO,ALNY,CSTE,LBTYA,URBN,SPY&p=6&O=111000
Why would you pay more for underperformance?
-
I wouldn't. I'm not underperforming. If I did I would go back to indexing in a minute.
-
I've been outperforming for too long to go back to indexing.
I'm not giving you a stock pick.
I don't know what's going to go up 10X in the future. That's why you do your research and spread your bets.
I like learning about companies and investing.
In reality, most of the reason that people do poorly in investing is their behavior - poor timing, panic selling, chasing performance, etc.
This is what company research means to me:
Financial statements of companies are comprised of dense technical language: confusing and opaque. For example, the pension accounting of a financial statement is in of itself a whole subset of accounting terms. Also, the company chiefs will play around with expenses to game the financial reports to make it look like the company started off badly and improved greatly. Shares are bought back to increase the earnings per share - and does higher e.p.s. affect the executive compensation?
Also, as Scandium pointed out there's no way to time buying a stock cause you can't predict the future. So "poor timing" is really just bad luck of a well-intentioned stock investor who tried to do "company research."
-
I've been outperforming for too long to go back to indexing.
I'm not giving you a stock pick.
I don't know what's going to go up 10X in the future. That's why you do your research and spread your bets.
I like learning about companies and investing.
In reality, most of the reason that people do poorly in investing is their behavior - poor timing, panic selling, chasing performance, etc.
This is what company research means to me:
Financial statements of companies are comprised of dense technical language: confusing and opaque. For example, the pension accounting of a financial statement is in of itself a whole subset of accounting terms. Also, the company chiefs will play around with expenses to game the financial reports to make it look like the company started off badly and improved greatly. Shares are bought back to increase the earnings per share - and does higher e.p.s. affect the executive compensation?
Also, as Scandium pointed out there's no way to time buying a stock cause you can't predict the future. So "poor timing" is really just bad luck of a well-intentioned stock investor who tried to do "company research."
Well, if you are investing at all, you are trying to predict the future, or at least being optimistic about it
-
I posted a study I found interesting to social media recently. It followed ~2000 families to generate its results which were peer reviewed.
A friend who disagreed with the results posted - "That study must be wrong. I went through the same thing and felt X about it."
My reply was that rebutting a scientific study with an anecdote is like bringing a butter knife to a chainsaw fight.
To be fair I can sympathize that it's hard to penetrate the mists of survivor bias. It's a lot easier to pat one's self on the back and think "I'm freaking awesome!"
-
No not recommended. They started out with Motley fool stock picking newsletter , then they added a dividend stock picking newsletter then came the individual Motley fool pro when to buy and sell newsletter $2500 p.a. for that one .Now their latest number 4 in the series a Motley fool million dollar portfolio they haven't said how much this one will cost yet.
I get these in my email every day, half price last chance so get in now. Lowest price ever , last chance. Closing at midnight tonight. :)
They make their money through selling stock picks to the gullible , apparently their stock picks are averaging 50% above the market its a wonder they aren't in the Bahamas on a sailboat and retired not still flogging newsletters.
-
I've had trial newsletters before (never signed up for them) where they advise on stock picks, normally they have some dividend ,some growth stocks and some small caps maybe some hybrids and a model portfolio included.
Not Motley fool, these guys have been around for years but their recent push into Australia has seen the release of a $200 year stock newsletter they then followed up with a $200 dividend newsletter followed by a hidden gems $200 small cap newsletter followed up by a Motley fool pro $2500 a year and now the latest and greatest Million dollar portfolio how to use all their previous picks to construct a portfolio what to buy and when. You might think this would be free when you have purchased all their other products :)
No no no , only $1499 for one year saving a massive $500 but better get in quick they're only taking the first 1000 numpties oops I mean lucky investors to sign up if you believe this I have a bridge in Sydney you might be interested in . Or for 5 yrs for only the low low price of $3999 save $800.
I wonder whats next?
-
Re: the Australian version, it does have a 30 day money back guarantee.
I signed up and within 2 weeks I advised them that I would like to cancel my membership. They refunded my subscription fee within days, no questions asked.
So for those curious to have a peek they do honour their promise of a 30 day free trial. Not sure if its the same in the US.
-
PaulMaxime.. what publication do you use? SA? I am over 50 and lost money due to a small business which didn't do well. I know I won't make a million overnight.. but I would like to/need to do what I can over the next 10 years. thanks.
-
PaulMaxime.. what publication do you use? SA? I am over 50 and lost money due to a small business which didn't do well. I know I won't make a million overnight.. but I would like to/need to do what I can over the next 10 years. thanks.
Stock advisor is a good start. They do offer money back guarantee, so no risk on your part if you don't like it. Prepare for stock investments to be volatile - you aren't going to make money every month or even year, but over a long time you should do well.
-
Just read this thread. I like to give high fives when high fives are deserved. PaulMaxine, high five!
-
Love the boards, have read it almost every day since the late 90s. Never paid them a penny - and no plans to ever do so.
When Motley Fool first opened in the UK, it was a complete breath of fresh air, pushing people towards index trackers and away from managed funds and pointing out a whole host of other ways the financial services industry were making money from us.
Unfortunately, there isn't much of a business to be made from doing that and they now mostly exist from getting fees from selling investments, insurance, savings accounts etc. Some of their writers are pretty good, some aren't. I ignore both.
-
Just read this thread. I like to give high fives when high fives are deserved. PaulMaxime, high five!
Thanks.
-
I too am thinking about a Motley Fool subscription, which is how I ended up here. I am also an early retiree (retired at age 43). I still haven’t decided about MF, but I wanted to contribute to this discussion, to let others know that despite what you’ve heard, it’s not impossible to beat the market. And you don’t have to be Warren Buffett.
Yes, I know about all the studies that “prove” you can’t beat the market. I also know of studies that disprove it (see http://www.people.hbs.edu/jcoval/Papers/persist.pdf for e.g. or refer to http://fortune.com/2012/11/21/can-you-beat-the-stock-market/).
FWIW, I agree with pretty much everything that PaulMaxime (and KBecks2) said. Don’t dismiss them, or me, because everyone tells you we’re wrong. Everyone also tells you it’s impossible to retire in your 30s or 40s, but MMM did, and so did I, and so have many others.
If you have a feeling that maybe you could do better than an index fund, but haven’t done anything because everyone tells you that you are *guaranteed* to fail, then my advice is to ignore everyone and go for it. I no longer have an opinion on whether individuals can beat the stock market. All I know is that I can. I’ve beaten my index (the TSX) by a LOT, in both up and down markets (more than I ever thought possible, given what I’d read over and over again). Granted, I’ve become more sophisticated over the years, and I now also sell options instead of just buying and holding stocks, but nothing I do would be considered anything other than basic (my background is in the arts - not finance).
Holding individual stocks as opposed to index funds is not for everyone. But I would be wary when everyone “knows” something. Maybe everyone is wrong. Wouldn't be the first time.
(Also: Consider the fact that for every chump selling at the bottom, there HAS to be a counter-party who is buying. We are told that mutual funds underperform, as do hedge funds, as do pension funds. So who, exactly, is buying when everyone is selling at the bottom of the market? People like me. We exist, and we’re not stupid or delusional. But I get why you would think that. The opposing view has a choke-hold on public opinion. I regret listening to others and not trying my hand at stock picking earlier.)
-
BTW, if I haven't said it already, Saul's Investing Discussions is one of the best boards on MF's free forums.
Do you have a link, searched but couldn't find anything
I'm also on the side of out performing the market, it's a matter of discipline and focus. The main reason people do poorly is there stock picking method is a mess. Got an email from a friend asking about a mining stock, told her only to spend her Friday bingo money.
BTW David Stanely (Canadian Money Saver) has a 25 year track record of beating the index. His system is simply to mimic the Dogs of the Dow. Takes only a few mins per year. So yes beating the index isn't difficult.
-
Unsure about the subscription, but a few of their podcasts are fairly interesting
-
An $8 commission on a $6000 investment that I held for 14 years has less than 0.01% annual expense ratio. And now the stock is worth $260K
Which stock did you buy? Just curious . . . I had a similar performer, EMC, back in the late 90's. Didn't get to the final value you did, I sold half on some of their splits in order to diversify.
-
Strongly advising you not to spent money on this useless website/magazine. As they always show up on Google Finance news I do read their headlines sometimes. I have seen numerous time they just provide "sensational" news and most of there advice is just abysmal. Usually you should do the opposite of what they tell you to do to make a good investment! There are better places to get your research. Seeking Alpha, Market watch...
Also as a novice you should wonder if you should really start investing. As 95% of individual investors perform worse then the S&P 500 index. Investing in individual stocks can also consume a lot of (valuable) time which you could then spent on earning money in another way. Most investors are probably best off investing in a tracker of the S&P 500 index, Berkshire Hathaway, Markel Corporation or a combination of those. These are my golden 3 equity investments. But you really need to do your own research before buying any stock or financial instrument at all.
-
Strongly advising you not to spent money on this useless website/magazine. As they always show up on Google Finance news I do read their headlines sometimes. I have seen numerous time they just provide "sensational" news and most of there advice is just abysmal.
At the moment the only money I'm spending is a subscription to Fastgraphs. In general my thinking was less about trading ideas and more about finding stocks that might not be on my radar.
To clarify one point, yes an investor can beat the market but it requires focus and discipline and learning and sticking to a style. Most investors don't take the time to learn and develop a strategy. For myself it's blue chip dividend growth stocks, Canada only and at the moment nothing from the oil and gas sector. But that's only about half my portfolio, the other half is in ETFs
-
I've always been a hobby investor in individual stocks.
I listen to 2-3 of their podcasts and listen to every episode. I think Motley Fool (as of today) is an excellent organization. They were not as good in the mid-last 90's, but the leadership seems far more experience and mature.
Most of my best holdings came out of listening over the last four years - Most of the time they were companies I already knew and just thought their stock looked expensive. (Costco, Nike, Home Depot) 2-3 years ago. They also turned me on to a home run three years ago when Cracker Barrel was under attack by an activist investor, I dug into that company and saw the activist was right and management rapidly improved their company.
As for the subscriptions, that's tough. You could do one of their newsletters, model a portfolio after it, and expect the returns of a mutual fund. I think its really about what you enjoy doing as an investor. I personally love the control of individual stocks for 35-50% of my portfolio.
-
An $8 commission on a $6000 investment that I held for 14 years has less than 0.01% annual expense ratio. And now the stock is worth $260K
Which stock did you buy? Just curious . . . I had a similar performer, EMC, back in the late 90's. Didn't get to the final value you did, I sold half on some of their splits in order to diversify.
Apple. I've sold about half of it over the years to buy a house but what I have left was originally $6K and is currently worth about $220K.
-
Thank you for asking about a Motley Fool subscription. I work for The Motley Fool, and thought it'd be helpful to add a some context.
- Our mission is to help the world invest better. We all thoroughly believe in it. Whether you subscribe to one of our services, someone else's, or regularly invest in an index fund (I do too!), as long as we've helped you make better investing decisions then we've succeeded.
- We believe investing is long-term in nature. However you choose to invest, please practice patience.
- You can access a lot of wonderful content for free on Fool.com and through our podcasts - podcasts.fool.com
- We believe in transparency. The details of each recommendation our services make is recorded. All buys, sells, winners, losers, and ongoing coverage are available to members in every service since inception. Our founders insist on it. Furthermore, all 'Fools' (employees) report each of our personal holdings. Mine are here: http://my.fool.com/profile/TMFBWItime/info.aspx
- We believe in community. You can access ours for free here: http://boards.fool.com/
- We believe you can be a successful DIY investor - something that likely resonates with this site's readers!
- And to touch on the main point of this thread, I'd encourage you to explore our services and verify their returns for yourself. You can access a 30 day free trial of Motley Fool Stock Advisor (our largest and most popular service) here: http://bit.ly/1VsWXhG
If you're unhappy with the service just call us within the first 30 days of your trial and you won't be billed at day 31.
We realize that even with our current range of services that we may not have something for everyone. Even still, we'll continue trying to educate, amuse, and enrich to the best of our ability.
Foolishly,
Austin
-
LRI,
Interesting comment on DIY. I've followed the Fool since the late 1990s. In that time, it's gone from an ad-funded educational site that adamantly refused to tell visitors what to buy - preferring the hard work of teaching fundamental analysis to the willing - to a tiered provider with services running into the thousands of dollars.
Just before I found MMM and doubled down on DIY, I did pay $99 for a subscription. The analysis was interesting, but I lost interest after a month or two, partly because I got more marketing emails for higher-end services than actual reporting/analysis. Most telling, I still see TMF ads teasing the same looming disruptions three years later.
I think they started with great intentions, nearly went bankrupt as a fishing school, got jaded, and went back to selling fish.
-
I've been outperforming for too long to go back to indexing...
We Mustachians should be questioning the conventional wisdom where we find it.
It never hurts for a mustachian to have a healthy level of self confidence, but the entire tone of this string of comments hits an oddly sour note to my spidey senses. Especially "We Mustachians..." ouch, just ouch.
-
You may as well just spend that money on slot machine expert strategy videos for casinos.
Sent from my iPad using Tapatalk
-
For the DIY idea as the question is: can I make something by myself or do I need an expert (aka a person that deals with a topic full time or: the 10000 hour rule)? I figured out that I´m quite limited when it comes to finding new stocks. There are too many out there and I find myself usually in a cycle of reading the usual buzz-news about certain blue chip stocks, that are hyped. But I assume that "the most talked about" is a quality criteria to buy stock.
And it´s also good to keep in mind that most of the "free content" you get on the internet is usually not free. Journalism is eroding when nobody is paying for content. And we see the rise of clickbait headlines and sponsored content instead. Anyway: I´ve been following fool.com and for a while and believe the quality of their analysis is good. You get solid ideas which are positive but not too over-excited (it could be a bit more pessimistic-bearish, though). It´s a good base to start your own analysis on stocks. Put there is no guarantee for success and even some stocks fool.com recommended were real bummers (others were not). It depends on what you´re looking for.
I´m looking for a sparring partner to train with. I disagree with a lot of what I find at fool.com. E.g. I would never ever invest money in Twitter which is a current buy recommendation. To put it simple: there is no mythical stock analyst or prophet giving you recommendations for stocks that make you rich. And at the moment most US stocks are far way to expensive to make a decent profit if you start to buy now imho. Nonetheless, I just subscribed to the Rule Breakers newsletter and if I crunch the numbers: $129 for 2 years with 48 recommendations total is $2,68 per stock analysis. Yup, I´m willing to pay that.
But for the sake of the argument on statistics: I followed the discussion on ETF and the underlying assumption of Efficient Market Hypothesis for quite a while. Luckily this is neither academia nor an orthodox religious matter where you have to take sides. I chose to invest in 25-35% ETF and the rest in individual stocks. One argument I found plausible: With ETF you are limiting your upward risk. I prefer to take that risk (at least with some of my assets). Nonetheless I hold some ETF.
-
This is especially true on a risk adjusted basis.
Gah. So true.
I've beaten the S&P nicely this year, but I had to do shit that literally kept me awake at night.
Plus, I fully acknowledge the role of luck, and don't plan on trying a repeat. Sleep is worth a lot to me right now.
-
I'm a long-term buy and hold investor of about 50 different companies, and I find motley fool odd. I have their pages bookmarked, and I enjoy their philosophy-of-investing articles - which are often stay-in-the-market, don't get taken in by the hype type stories, but then there's this stock-picking side which often seems to contradict those articles.
At least on their public side, there doesn't seem to be much consistency. There will be some articles saying stock X is good - and then it seems at that same time, but it might be days/weeks later - there will be others saying X is bad.
I don't think - I've ever bought a stock on their recommendation, but occasionally when a stock sharply moves, I'll read what they say about it - its just that I don't do anything based on what they say, or on such movements regardless anyway.
-
DH had a subscription for 2-3 years, around 1999...
Content
I enjoyed reading the monthly newsletter / guidance reports. They were well written, enjoyable, easy to follow and informative. I learned a lot about fundamental stock analysis from this, and it was a great complement to the (also paid through our account and brokerage fees) bank provided research which was a bit dry, but covered additional investment types.
For that reason alone, I would recommend MF over some the other subscriptions...
Please realize that in 2000, there was a lot less available content on the internet, and Cramer with his shouting style was big on TV. (I do not like Cramer).
Performance
We did not buy all the stocks, but only half of the recommendations. Somewhat on par for a typical return, although later reports in later years showed good trends. YMMV. I don't believe in stock picking for more than 15% of one's portfolio, so that may have had something to do with my aversion to following MF.... We stopped the subscription after a 6-7 month down trend....
-
I have a couple of Australian MF subscriptions. I've come to use them as a source of ideas rather than a replacement for my own decision making. You still have to do your own research IMHO. The forums are really great - a lot of value in there, but takes a while to dig it out. The recommendations that have flown have massively outweighed the losses on the duds (for me at any rate - I probably look seriously at 1/4 of their ideas).
Re: the chart showing where gains & losses have come from and whether you can improve performance over an all encompassing index... I read about 100 annual reports for listed companies last January as an experiment and I typically read 1-2 a week ongoing. I can tell you that, especially in the small cap world, there are a lot of shockingly bad companies that never have, never will and never _could_ make any decent profits. If you read a few annual reports you soon get your eye in and it doesn't take a lot of effort to spot them. Junior mineral exploration companies often go "shareholder mining" - raising fresh capital to spend on exploration, but more importantly, keeping the director's fees coming so they can keep their late model European luxury cars up to date. There's very little chance of making a successful discovery. I'm sure the TSX is swamped with the same.
If you just excluded those, statistically you'd do a lot better than the index. In fact, there has to be an opportunity for a JJAOMTCTSNHBL index fund - JJ's All Ordinaries Minus Terrible Companies That Should Never Have Been Listed.
As to whether you can beat the index... I am totally comfortable that if you take the time to understand how businesses work in general, how directors can act for or against shareholder interests and how a particular business under investigation operates it is straightforward (emotional issues aside) to beat the index over the long term for all the reasons PaulMaxime has spelled out. BUT, it does take a lot of time and research (probably re-reading 20 investing books 5 times each plus a couple of hundred financial statements and business strategies). Not everyone will have the time, the interest or, frankly, the acumen to do this but it doesn't mean that consistent outperformance is impossible for everyone. If it isn't in your zone, buy an index fund.
FWIW, I'm about 12% up compared with an ASX index fund over the last 2 years. Not bad - 6% p.a. outperformance - but a very short timeframe still. The strike rate and comfort level is improving with (somewhat expensive) experience.
-
BTW, if I haven't said it already, Saul's Investing Discussions is one of the best boards on MF's free forums.
Do you have a link, searched but couldn't find anything
I'm also on the side of out performing the market, it's a matter of discipline and focus. The main reason people do poorly is there stock picking method is a mess. Got an email from a friend asking about a mining stock, told her only to spend her Friday bingo money.
BTW David Stanely (Canadian Money Saver) has a 25 year track record of beating the index. His system is simply to mimic the Dogs of the Dow. Takes only a few mins per year. So yes beating the index isn't difficult.
I think they referred to this: sauls investing discussions - http://boards.fool.com/sauls-investing-discussions-120980.aspx by user SaulR80683
But After looking through a few of his positions (TESLA, AMAZON) I personally am not a fan...
Agree with you that out performing the market is a matter of discipline and focus. Which I think most people miss and thus it is better to advise to just do indexing (which also takes discipline and focus but at least takes less time and can be automated, hence improvinging the discipline ...)
Personally I also think beating the market as an individual is possible because of the reasons paulmaxime mentioned:
1: We don't have to compete with anyone else for quarterly performance. We can hold on as long as we want. Time frame is the biggest advantage.
2: Invest in businesses not names or charts or whatever. Buy excellent companies and hold on to them for a long time.
3: We can control our own behavior.
If you want to keep it simple, as an individual investor and beat the market: buy the index and then play with options or do something on margin only when you find an opportunity (the take over of SABMiller by ABinbev comes to mind, the stock of SABMiller was at 40 GBP for weeks even after the offer of 44 GBP was put forward, made a nice extra 5% on my total portfolio there …).
For money managers, they have the added difficulty that they need to beat the index AFTER their wages + the expenses and profit of the company they work for which makes it an almost impossible task. If I had overhead and had to pay myself a decent salary I would have a lot less confidence in me being capable of beating the index …
See stock picking as a side gig that can bring in some decent money. But, if after 5 years you have not consistely beat the index be honest with yourself and just buy index funds ...
-
Way to generalize. My swks shares doubled in under 1 year. Amba is up over 200% in two years. This is above average performance.
Maybe by a little bit. The market as a whole is up over 300% in five years. And I got that performance without paying for anyone's advice.
That is completely incorrect. Not even close. I'm pointing this out so that others don't buy into your data point.
-
That is completely incorrect. Not even close. I'm pointing this out so that others don't buy into your data point.
It was true when I posted it in July of 2015.
Necro threads can be confusing. I don't blame you for calling me a liar without double checking the relevant facts. I won't hold it against you.
-
Sol, you are very charitable with that reply.
-
Read SA articles. Select articles based on stock and immediately go to comments section and read the WHOLE thing. There is a wealth of information and you'll get the skinny on sentiment.
The articles are mostly useless. Although, there are some analysts that are worth reading you'll eventually weed them out. But, don't ignore their articles. Just go to the comments section. A lot of smart people (and ignorant) post comments. You'll also learn to weed out the ignorant commenters as well.
-
Sol, you are very charitable with that reply.
I don't think so. Calling out bullshit on the forums is important. If someone is making false claims, we all have a responsibility to speak up, and Cache thought he was doing the right thing. I'm not mad at that.
And that 2010-2015 window really was a pretty incredible time to be an index investor.
-
Sol, you are very charitable with that reply.
I don't think so. Calling out bullshit on the forums is important. If someone is making false claims, we all have a responsibility to speak up, and Cache thought he was doing the right thing. I'm not mad at that.
And that 2010-2015 window really was a pretty incredible time to be an index investor.
But, but, this is the internet -- very few people would choose to pause and think of it from the author's POV. Think about WHY or where the comment came from.
-
I would definitely recommend the Motley Fool's service. I just wrote a blog post explaining exactly why i this it's worth the money. In short, they recommended i buy Amazon 3 years ago which i could not be happier about. Overall, they're stock picks continue to be profitable for me, so i am still a customer.
Suuure...
One post account shilling their blog and the Scamming Fool subscription. Ugh.
-
I miss the old think or swim. I read some articles, but haven't found the service very in-line with my thinking. Approach with an open mind and learn about new areas I haven't treaded, but other than passing interest...others have said what needs to be said.
-
I think Think or Swim, Motley Fool, Seeking Alpha, just about all of these things are a waste of time and money. Its really only entertainment and won't necessarily help your investments, only hurt if you take any of the the advice they give seriously (unless you get lucky on a gamble stock pick). I wouldn't want to pay money for those temptations.
Even though this thread is from 2015 and was revived from the dead, this is all still relevant to anyone considering it.