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June 28, 2001 7:23 AM

Learn about the Foolish Workshop at the Motley Fool and let the numbers decide which stocks to pick.
posted by MarkO (9 comments total)

And then graduate on to the Mechanical Investing board, where volunteers have tirelessly researched and backtested these techniques (over 100,000 posts).
posted by MarkO at 7:25 AM on June 28, 2001

MarkO, is the Motely Fool so desperate for visitors that they paid you to post here?
posted by dayvin at 7:32 AM on June 28, 2001

I lost a lot of respect for Motley Fool when they took so long to admit that their Foolish Four investment strategy was a money-losing failure of immense proportions. The last place in the world to report this fact was Fool.Com.
posted by rcade at 7:43 AM on June 28, 2001

Of course not, dayvin, but thanks for ruining the excitement of posting my first link. Anyway, I'm not promoting the Fool, just the activity that transpires on their message boards--much of it knowledge that I have found invaluable.
posted by MarkO at 9:34 AM on June 28, 2001

rcade, isn't there an upturn in value investing again? Yes, we all just went through a really crappy spell on the market, but one has to keep a long term perspective.
posted by machaus at 10:42 AM on June 28, 2001

Rogers, I don't think it's "a money-losing failure of immense proportions", though this is NOT the year to measure it (all stocks down). It just isn't as reliable a trick as the past twenty-five years of analysis indicated it might be, when analysis was extended to 50 years and out. Indeed, it did fairly well during the 1980s and early 1990s. Look especially at the 20-year rolling returns, Rogers, and come back to us on that indictment. ;-)

As far as "taking so long to admit it", they were never some stonewalling brokerage house that suggested you do this just because they did (and certainly not because they were making commissions from the stocks you bought). They did all their analysis right out in the open, with contributions from members. I watched most of that happen. There were open debates about how best to determine the validity of the strategy (or any other). There were blisteringly precise critiques of any outside analysis of the system. I think they did well, and I still think the Foolish Four is getting a bad rap.

And if anybody just bought the Foolish Four because The Experts Told Them To, they were the small-F fools. Being a big-F Fool is all about knowing what the hell you're doing when you invest. If they failed to pick up that pre-eminent message from the Motley Fool, they weren't paying attention and deserved whatever losses they incurred.

MarkO, the Fool isn't exactly unknown. Sort of a generic link, so no wonder dayvin wondered about your motives.
posted by dhartung at 10:46 AM on June 28, 2001

Of course the Foolish Foor looks good in the 1980s and 1990s -- those are the numbers that prompted the Fools to create the strategy. Anyone can pore over past performance data with simplistic experimental strategies, find one that strongly outperforms the Dow, and write a book claiming it can Crush Your Mutual Funds in 15 Minutes a Year.

I've listened to the Motley Fool show on the radio a few times and think they have a lot of commonsense advice for investors. But the way they discovered and popularized the Foolish Four is contrary to all of that -- it catered to fools and took advantage of them. Not many investment counselors publish a book in 1999 that's such an abysmal failure one year later they have completely abandoned the strategy.
posted by rcade at 11:11 AM on June 28, 2001

Watching Datasnooper and other big brains on the MF bulletin boards demolish the data behind the Foolish Four was an educational experience in itself.
posted by snarkout at 12:47 PM on June 28, 2001

i <heart> TMF... :-)
posted by fooljay at 1:20 PM on June 28, 2001