Motley Fool

I’m starting to think that super overpriced stocks pay to have The Fool pump their stocks. Can you see FRAUD or is it just me?


I despise TMF’s marketing tactics as much as anyone. But no one held a gun to your head and forced you to buy their “newsletters” or their endlessly-cycled, bad stock picks.

“Don’t get mad. Get even.” Buy a copy of Ben Graham’s book, The Intelligent Investor, and work your way through it, pencil in hand, making notes. Then apply the lessons he offers to your own investing.

As just one example of following his advice, I’m now up 50% --in a 22-day holding period-- on a Russia trade I did. That’s how value investing is done. “Buy low; sell high.” Wash, Rinse. Repeat.

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Hi, dsalem23.

Fraud is a serious word to throw around casually. I would suggest that a focus on value reflects a misunderstanding of TMF’ investing Foolosophy of investing long-term (3-5 years or longer) in companies with strong potential business growth. Valuation, which focuses on the market value of a company, often masks the company’s business operations. A company that is heavily reinvesting in growth, be it R&D or S&M, will often have a high valuation but is still a growth opportunity. So I would say that you have to put valuation in context to fully understand a company.

Who notes that since the premium service real-money portfolios rarely sell (in fact, some have a minimum 5 year holding requirement and most have a minimum 5 year holding strategy), unless there’s a fundamental change to the long-term (3-5 years or longer) buy-and-hold investing thesis, it could be argued that TMF forgot the dump part of any pump-and-dump accusation…

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“I’m starting to think that super overpriced stocks pay to have The Fool pump their stocks. Can you see FRAUD, or is it just me?”


Most definitely it is “just you”, because the G Boyz run an oh-so-righteous business that no has ever before has complained about, especially if you conveniently ignore the long list of complaints filed about them with the Better Business Bureau or the endless posts in this and other forums that go like this, “On advice of TMF, I bought such and such. Now I’m losing money.”

So, what’s the explanation? In the early days of TMF, when they were running their website at AOL --'member them?-- the G Boyz reveled in poking fun at the scams run by Wall Street. These days, TMF has become “the establishment”, as they extract income from the naieve and uninformed who just want to be told what to buy and think they will get rich following the demonstrably the bad advice of “Buy-and-Hold”.

Yes, the G Boyz are probably receiving payment in some way for promoting stocks. It’s a common practice in the financial industry, and it is called “soft dollars”. For sure, their stock picks are almost never timely, with lucky guesses being endlessly recycled to boost their claimed performance record, while the losers are quietly buried.

So, what to do? Stop subscribing to their newsletters. Stop acting on their advice when it comes to buying specific stocks. Do cruise the various forums to find the ones that deal with issues that interest you. There are still a few old-timers from the early days of TMF who post their thoughts and who are willing to help beginners. But the one thing you really should do is sit down and write an investment plan in which you identify means and goals and accept the fact that it’s going to take 10 to 15 years–or three business cycles of boom and bust – to learn how to consistently pull more money out of markets than you bring to them, be your chosen market stocks, bonds, commodities, currencies, options, country funds, whatever. Yeah, s/m cap “growth” stocks are sexy. But they’re aren’t the only path to building wealth by accepting risk, nor even the best one for most people, who really should be “indexing” --as Ben Stein explains it-- and getting on with the rest of their life.


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