I've been following "The Motley Fool" group and stock picks and have bought small amounts of several. Are their successes to good to be true? Does anyone have any experience with them?
My experience with them tells me that they are very transparent. Their success are true, but the articles that advertise them are a bit click baity. They take their individual successes, but don't mention their losses. However, if you are a member you'll see some of their major losses, but as a whole winners have outweighed their lows.
What's with the name anyway?
I did but not anymore.
To answer @ MIng C. question:
The brothers who started the Motley Fool are English majors that are taking a character from a Shakespearean comedy named "As You Like It".
It references the one character — the court jester — who could speak the truth to the Duke without having his head lopped off.
I've listened to a few podcasts from them but have never invested in any of their recommendations yet. I did learn about the "Little Book of…" series from them. Those books have definitely informed my decision making and investing style.
The Motley Fool seems to encourage active investing. When you buy & sell stocks, you may pay transaction fees which eat away your profits. I prefer long term investing with passive index funds.
Per @James H.
The Motley Fool seems to encourage active investing. When you buy & sell stocks, you may pay transaction fees which eat away your profits. I prefer long term investing with passive index funds.
I'm in agreement it probably would be defined as active investing …, but I think that would not be painting an entirely accurate picture.
So here is a link to investopedia definition on passive investing:
https://www.investopedia.com/terms/p/passiveinvesting.asp
Passive investing broadly refers to a buy-and-hold portfolio strategy for long-term investment horizons, with minimal trading in the market.
As such the Motley Fool is also a buy and hold portfolio strategy they've held to many of their recommendations for years. In fact they are an advisory service so that you can have an easier time picking individual stocks that you would like to buy and hold for a long period of time. So while it is probably active to some because you are picking is is not far off from index investing. Just more risk, but that also means more gains.
So as I'm a person who is more neutral I index about 80% of my portfolio, but definitely have picked individual stocks that I felt would win in the long run. I'll say that with my indexed diversified portfolio (Gold, S&P Index, MSCI International Index, Treasuries, US Total Bond) I'm down about 2% year to date but my personal picks as a whole are up 15%. In terms of if I went all in on the SPY and held YTD it would be only up 2%. This does not factor in dollar cost averaging. So as long as you're not a day trader the buy and hold strategy works (albeit riskier) for even picking stocks if you do enough research.
Their picks often go up not because they are great picks but because they have so many subscribers who believe in Motley who keep purchasing their recommendations so the stock keeps going higher. They blew it on Luckin coffee though. Recommended a stock that turned out to be fraudulent.
Per Ken R.
Their picks often go up not because they are great picks but because they have so many subscribers who believe in Motley who keep purchasing their recommendations so the stock keeps going higher. They blew it on Luckin coffee though. Recommended a stock that turned out to be fraudulent.
Disclosure: Not a member of the Motley Fool
Ken R. is right in saying that they blew it on Luckin Coffee, but it's not something I would hold against them. People with far more resources have been swindled like those who invested in Madoff or Theranos. Luckin Coffee, like those entities, had a good story that people fell for.
On the $@!#% side I would not say that many of their picks go up due to their large number of subscribers. That would be a misrepresentation. For example I think two of their most advertised stock picks are the Trade Desk (TTD) and MercadoLibre (MELI). Both have done extremely well and consistently do so, but if you look at the data the institutional ownership for MELI is at 85% and TTD is at 82%. This means they are part of other funds who are buying them. These funds are what really move the stock in terms of demand and they didn't do it based on a recommendation by the Motley Fool. In fact, I believe private investors hold at best 5% sway on these stocks and that would mean that all 5% were Motley Fool subscribers.
However, Ken R. is not wrong in that they do have a larger subscriber base. So in smaller stocks they may have a greater impact if there is low institutional investment
Great info!
Has anyone noticed the change in the atmosphere pertaining to investing?
Per @ Sebastian A.
Has anyone noticed the change in the atmosphere pertaining to investing?
Would you describe what the change is?
I am new to investing, so all I read here is educational for me. Thanks
I just started with them and they seem knowledgeable. I hope it will be the best decision i've made
I find the articles helpful (non-member) for beginners. Good way to learn the basics and dip your toe in the water. No one website or company has all the answers or is "best" – or they'd be earning constantly and never lose. Investing requires education and Motley Fool and other long-standing sites offer a decent place to start. Just keep you education active and never trust one single source.
They know more than me but the S&P 500 is the proven winner over time.
They have some interesting and useful articles to learn about finance and investing.
I did but not anymore.
Agreed!
Over 20 years ago it was a nice & informative resource. Today I keep thinking WTF? with some of their recommendations.
Change of ownership perhaps?
No
I followed them in the early days; not so much any more
I do. As much as I trust anybody who has an opinion about what to do with MY money. That is the important thing. It is ultimately my money. I have to make the decisions but information from all sources is helpful in making those decisions.
This was very informative Thank you
Very informative, I will not be using them.
Provides answers to questions I didn't even know how to ask.
