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The MOTLEY FOOL INVESTMENT GUIDE : How the Fool Beats Wall Street's Wise Men and How You Can Too

The MOTLEY FOOL INVESTMENT GUIDE : How the Fool Beats Wall Street's Wise Men and How You Can Too

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Rating: 5 stars
Summary: Educational for new investors. Highly recommend.
Review: With the birth of my daughter, I wanted to ensure I invested smartly for her future. I was participating in my company sponsored 401k plan and thought I was earning good returns for my retirement. I figured I would invest my daughters money following similar rules. So I perused several books for "plans" and was intrigued by the Motley Fool approach so I checked out the web site and bought the book. Was I surprised when the Mootley Fool guide opened my eyes to the real truth of my returns! I was underperforming the benchmark S&P 500 by several percentage points a year during the best bull market ever! This book placed in easy terms what I should do to better position myself financially. Following the Foolish Four approach is easy, systematic, and most of all, time tested for great returns. I would recommend anyone just starting out in investing, to pick up a copy and learn the truth of the Wisemen on Wall Street.

Rating: 5 stars
Summary: Foolish stock-price growth is possible.
Review: The Motley Fool is easy to read, simple to understand and amusing. Yet, the more I read, the more uncomfortable I became. First, it is clearly written for the person with little or no investment experience and no business or economics background. That would seem to limit its audience. I felt at times like I was being talked down to, that this book was not for me. Second, the book gave good advice in some areas - Part II on mutual funds is probably the best. When it reached Part VI on shorting stocks, normally a very risky strategy, I became concerned for the newer investor. In addtion, this book would be more useful if the authors gave some guidelines on how much of one's portfolio should be invested and percentages for using these different approaches. While I say "bravo" to their attempt, I am concerned that what I call The Misconception Stall (making decisions based on incomplete or misleading assumptions) and The Communication Stall (not having the message heard or understood the way it was meant) run rampant here. For example, as companies move with their seasonal or industry cycles, different investment approaches are warranted. Dividend models tend to bring in value players and "bottom fishers" who are there because they are not expecting growth in the stock. Is this where you want to be? Also, there are actions companies can take, such as buying back shares at the bottom of a cycle and issuing shares at the top of a cycle that can result in more rapid stock-price growth than any of these approaches. I hope in The Gardner's next book they will address these issues more "fooly"! Also, new investor would find it very helpful to have a list of questions they should ask the company they are about to invest in. There is no substitute for asking the right questions.

Rating: 4 stars
Summary: Good intro for wannabee Fools
Review: This book is pretty good for first time or novice investors, the Gardner brothers discuss the advantages and disadvantages of different investment methods most notably: mutual funds, index funds, and stocks. Also it seems these Fools (yes they like to be called that) like investing in Dow stock, much of their information regarding Dow stocks appears to come from Michael O'Higgins author of Beating the Dow. Another method that the brothers introduce is one of their own for picking out small cap growth stocks, here's what they look for:

Sales of less than $200 million
Daily Dollar Volume of $3 million or less
Low Price $5-$20
Net profit margin of 10% or more
Relative Strength (IBD) of 90 or higher
Earnings and sales growth for the most recent quarter of 25+ or more
Insider holdings of 15%+
Cash flow from operations should also be a positive number

This book is primarily aimed at beginning investors who want to hold growth stocks for a year or more, however a lot of this book is focused on them talking about their website www.fool.com

My favorite part of this book would have to be the chapter on Zeigletics: The Penny Stock That Never Was.

Reed Floren

Rating: 5 stars
Summary: Common Sense, the most Uncommon Commodity
Review: Yo! Buy this book. You need to read it.

David and Tom explain why 80% of mutual funds return less than the S&P 500 average. Yes, it sounds crazy, but it is true. They have good advice about what to do about it.

These here Fools explain how your stock broker gets paid well, whether you do well, or not. They explain what you can do about it. Guess what? That makes some people mad.

These guys wearing jestor caps lay out common sense steps for taking control of your own financial investments, without taking more than a few hours each year. They lay out steps for finding, selecting, and determining the fair value of stocks. You'll get solid rules of thumb on when to buy, when to sell, and how to do this with confidence and security. While having fun.

Their methods work- finding good quality stocks, paying a fair price for them, and waiting patiently. They explain the details in a humerous and direct way.

I thought I was pretty smart, until these Fools laid everthing out in such an organized fashon. I learned a lot. I was inspired. I dumped my full service broker.

Now, maybe I have a few minor questions about a couple of things in the book... have you seen these guy's website? They have a STAFF of Fools to answer your questions, and hundreds (thousands) of people on-line, sharing ideas. Tom and Dave answer questions, too. Outstanding.

A lot of hot-shot finacial gurus are going to hate this book, but then, they are making money off of your ignorance.

Buy the book. Even if you are a financial hot-shot, they have compelling ideas, beautiful in their simplicity. Fool On, Tom and Dave!

Rating: 5 stars
Summary: For the courage to invest well - read this book.
Review: The Motley Fool Investment Guide was written for me. It told me that I was not alone, that the "wise men" of the financial world were not always so wise, and that my ideas were not necessarily foolish. It gave me the courage and the information to make investmnent decisions. The term "fool" is used because many "experts" would have us believe that novices would be foolish to adventure alone into the investment world. The "Guide" shows the inadequacies of much current expert advice. After learning some very simple, but very successful, strategies, the term "fool" becomes a badge of honour. I am now quite proud to be called a fool. I am also richer for following the advice offered in the book. The Motley Fool Investment Guide recommends a range of strategies. At the basic level it suggests a simple formula approach to stocks listed on the Dow (adapted from O'Higgins' Beating the Dow). It cites data showing it's superiority over the indexes for the past 30 years. The guide maintains that this approach takes about 20 minutes a year but I think it's more likely to take 2 or 3 hours - still time effective! Some investors will be content with this. For the more adventurous, the guide explains how to evaluate and select stocks which are likely to grow in the medium term. Their advice is clear and simple; anyone who can read and do simple arithmetic can follow it. Much of it is similar to the approaches of Peter Lynch and Warren Buffet, but more easily understood and useable. Best of all, these authors are accountable. Their web site (http://fool.web.aol.com) lists all of their investments and the public can decide how effective the method is though monitoring it in real time. This takes courage and demonstrates how sure these authors are. Since beginning their portfolio on 4 Aug. 1994, it has gained 168.39%. The S & P 500 has made 72.18% over the same period (to 4 Feb. 1997). This book is a classic and worth every cent. Dennis Rose

Rating: 3 stars
Summary: Decent Investing Primer, but not much more
Review: The Motley Fool Investment guide by the Gardners was a fairly interesting primer on the subject of investing, with a particular emphasis on stockpicking. However, that is ALL you should take it as. It should merely be viewed as ONE type of overview of the stock market that may or may not be valid under current market conditions.

Note: Beginning investors should be very wary of following the strategies outlined in this or ANY investing book with any significant sum of money. Run a simulation portfolio and test out the validity of these methods before you plunk your hard earned cash into some particular system. Be warned. My opinions may sound very negative and you may be at a loss of confidence, but I do believe you'd rather take a beating in your emotions before you take one with your portfolio.

Now, overall, the book offers some nice stratagems for newer investors and is written in a very friendly style to keep people interested. The book is laced with the Gardners' personal style of humor(which I wasn't particularly fond of), but they did manage to keep the book fairly light-hearted and easy to read. With that said, I believe a key flaw of this book is that it makes achieving market-beating returns seem fairly easy.

Would it be feasible to believe that anyone could suddenly start playing NBA quality basketball were that person to read and follow some simple exercises in a book entitled "Play Basketball like Michael Jordan"? How about "Tiger Woods in 20 Minutes"? Yes my friends, it is very possible to play pro ball by doing my secret exercises for only 20 minutes a day, because in my new book, I have outlined some very secret and powerful methods that will make your growth in talent and muscle EXPLODE! *cue slightly altered techniques found in a basic exercise manual wrapped around in clever and seductive writing.

The notion that someone can play professional, all-star level ball by reading a book and following simple exercises would quickly be dismissed as utter BS. But in the world of investing, 'secret methods,' 'the methods of the pros,' etc. etc., always seem to entice new investors into buying a $15 manual to learn the secrets to beat the market. Maybe Peter Lynch can get by on beating the pros by looking at investments only a few hours a week because his decisions are built on experience... It may be easy for a professional bodybuilder to lift 350 lbs, but does that mean the average man can expect to do the same? To suggest that the newcomer can beat the pros by spending only a few hours a week and using a very simple system sounds quite like the 'pro ball' scenario, no?

You certainly won't get consistent market beating returns by following the very scanty guidelines offered in this book. Another area of fault with the book is that, at times, it seems like you've just spent your hard-earned money on a big advertisement. The constant plugging of their website is extremely annoying to say the least. It almost seems as this book was geared to get you to join their website.

With all of that said, the book offers a decent, easily followed write-up of long term investing fundamentals. It's a nice overview of the subject of investing, and beginners will learn some good lessons, but by no means should they believe that by reading a couple of investing books and following the simple guidelines within should they expect to beat the market over the long-term. There's a reason most mutual funds don't consistently beat the market over the long-term. And no, it's not because the majority of mutual funds are run by complete dunces (some of you may tend to disagree). The objective of obtaining market beating returns isn't nearly as easy as it seems.

Rating: 1 stars
Summary: this book is bad
Review: The information contained in this book has been discredited by lots of academics and yes, even by the Gardner brothers themselves. Don't buy this or any of their terrible books.

Rating: 1 stars
Summary: Bad advice and hypocritical...
Review: This book is chock full of really bad investing advice. Aside from asserting that the way to riches is with a really basic and poorly tested stock screen (Foolish Four, Dogs of the Dow), they also claim that other systems don't work, etc. I find the advice pretty humorous now after owning the book for a couple of years through the bear market. You'll also notice that these two fools (yes, that's a lower case "F" for all you fool.com readers) no longer even run their real money portforlios as of 02/2003. Here is CBS Marketwatch's assessment of their performance:

"Of course, one year does not a track record make. How have the Motley Fool portfolios stacked up over the 6-plus years the HFD has tracked the service? Taking into account several portfolios that it used to maintain but which were discontinued along the way, the HFD calculates that the Motley Fool produced a 1.3 percent annualized return between Jan. 1, 1997 and Jan. 31, 2003, underperforming the 3.4 percent annualized return of the Wilshire 5000 over the same period.

Furthermore, among the 98 newsletters for which the HFD has data over this 6-plus year period, the Motley Fool stands in 62nd place."

Really this book should be avoided. I was going to sell my copy used, but honestly I felt the information in this book is so bad and do dangerous to other investors that I decided to throw it out instead. That way at least I know nobody else would succumb to its fallacy of easy money. I suspect their other books aren't much better. Stay away and read books by Bogle, Larry Swedroe, William Bernstein and other advocates of passive indexing. You'll do far better.

Rating: 4 stars
Summary: Finally, an investment guide for normal people
Review: Dave and Tom have created an immensely readable and informative book for the average Joe who wants to learn how to invest in the stock market. Their liberal use of humorous examples makes the book hard to put down. They explain why mutual funds are usually a bad choice, how to do your own research, how to avoid sky-high commissions, how to do your own research on companies, the difference between fundamental analysis and technical analysis (and which one is basically worthless), and even how to make money in a bear market (yes, it can be done, and it's a lot easier than you might think). Overall, if you are looking for a simple and fun explanation of how to get started in investing, you can't possibly go wrong with this one.

Rating: 5 stars
Summary: The Best of the Bunch
Review: Out of the three audio books on CD I have listened to, this one is by far the best! It pulls a bit of info from each of the other 2 books and then adds "investment guide" touches. If you are on the fence about purchasing a book from these guys I reccommend you purchase this one only and save yourself the extra $$$. (I purchased the set of all 3 audio books in a 3-pack)


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