[james4beach]

Thanks very much to @Jimmy and @MrBlackhill for motivating me to dig into the past history of The Motley Fool.

In the present day, this web site has a Stock Advisor service which claims to have an amazing stock-picking record. They show 5X the return of the S&P 500 index. Hmm that doesn't sound right... is it possible they are being misleading about their past returns?

Turns out, yes! See this Internet Archive historical record of Fool.com from 2001.

Exhibit #1 is shown below. This is what was on their web site in 2001. Here you can count 10 different stock-picking portfolios which no longer exist today, such as the 'Harry Jones'. In fact they wrote some very humble articles about how badly their strategies did.

It appears that the game at Motley Fool is creating many different stock-picking portfolios. Over time, some will (inevitably) turn out to work well. But most of their portfolios were total failures.

That means that the stock picks in their current portfolios are worthless.

Exhibit #2 is shown below. Here's a snapshot of the performance of one of their (many) past failures, the 'Rule Maker' portfolio. Uh oh ... it appears to have underperformed the major market indices, even during a bull market! How embarrassing.

 

[newfoundlander61]

Here is an example of their articles both are related to SU written days of each other but different writers.

(1) Stocks to Avoid: This Canadian Stock Has Been Treading Water for 16 Years - Suncor

(2) Canadian Investors: Here Are My 3 Stock Picks for 2021 - Suncor

 

[Jimmy]

Thanks very much to @Jimmy and @MrBlackhill for motivating me to dig into the past history of The Motley Fool.

In the present day, this web site has a Stock Advisor service which claims to have an amazing stock-picking record. They show 5X the return of the S&P 500 index. Hmm that doesn't sound right... is it possible they are being misleading about their past returns?

No.

All that is possible is just you being dishonest. Their main flagship service is in fact 'Stock Adviser' that has been in existence since the mid 90s in fact and is not a 'failure' so you are wrong from the start. Your little obscure blog link is from some forum poster about some 20 yr old 'theme services' that change overtime. New services start like '5G for ex to replace older themes. You omitted to mention that of course.

You were posted their results from independent reviewers of the main 'Pro Adviser' too at least 3x yet you still post misleading records - here it is again. This is their actual current record over 20 years.

Motley Fool Review - Is The Stock Advisor Program a Good Investment?

In this Motley Fool review, we provide an in-depth analysis of the Stock Advisor program. Considering paying for a subscription? Read this first.

daytradereview.com

Over time, some will (inevitably) turn out to work well. But most of their portfolios were total failures.

That means that the stock picks in their current portfolios are worthless.

That is false. Their flagship service " Pro Adviser" has been in existence since the mid 90s - they started in 1993. It has returned multiples of the market. So have their other 2 main services. I encourage you to study them vs posting misleading false accusations.

View attachment 21047

Nice 20 yr old post but who cares if they lost in one year in in one service 20 yrs ago .

They have a proven 20 yr performance record.

Here is another independent review w some of their picks and performance from 2002. Only 2 didn't beat the market.

Motley Fool Review - Can You Trust the Stock Advisor Program?

Looking for stocks that outperform the market? We did an in-depth review of Motley Fool to see if the Stock Advisor program was legit or a scam.

toptradereviews.com

Do you actually think Disney , Amazon, Costco, ebay , Paypal , Fedex etc are bad investments over 20 years? lol

Here are their results in the pandemic year. 3x the market

Maybe you can put aside your pet peeves and see their service helps investors.

 

[MrBlackhill]

@james4beach I'm sorry, but you've only posted archives of their very debut in the 90s and sure they have made mistakes in their young years during the dot-com bubble, as many other. Read the quote in my signature. Find some archives of the last two decades.

@newfoundlander61 Yes, I've seen many ads like this and I agree that's very funny. Those articles are just free content and they are also meant to be ads so that people gets to know Motley Fool. Their authors may have different opinions and I think that's healthy. I prefer reading articles where 50% are bullish and the other 50% are bearish so I can make my own opinion based on their arguments. If all articles about a stock would be 100% bullish, I'd feel I'm missing some information. There's no truth in forecasts, they are forecasts, that's it. For instance, should you invest in TSLA or not? Certainly one of the most documented stock of the moment. Articles certainly aren't all bullish or all bearish.

Dalio says to have more geographic diversification, Buffet says you shouldn't bet against America. Buffet made a bet against hedge fund managers that they couldn't best the index and he won. He also said he knows a handful of people who can do 50% CAGR with small money (one million). The world is full of contradictions.

A subscription will allow to see a list of stocks and their current opinion about it, so it's less misleading than reading two articles with opposite opinions, because you get to know their final thought about it. Yet, I just see that as a list of investing ideas where I should do my own due diligence before buying.

I'll tell you that, I don't like how many of the free articles are written because many of them are sensationalist. I've subscribed just to test their services and I don't like how they spam with emails of events and other services that I should not miss (with a price tag on each). The paid service has more quality articles. But if you're someone rational who can see through those marketing technics, you won't get caught.

Why did I subscribe to Motley Fool at the end of December? I wanted to test it for 2021. Then I'll decide if I continue with them or not. What I want to test is that I see Motley Fool as a provider of investing ideas, ideas which I would not find from my own screening. For instance, in 2020, from stocks I've bought after I've discovered them in some free Motley Fool articles (before my subscription), I've made in profits more than 20x the cost of a subscription to Motley Fool. That's why I was willing to give them a little of those profits to test it.

 

[like_to_retire]

Yes, I've seen many ads like this and I agree that's very funny. Those articles are just free content and they are also meant to be ads so that people gets to know Motley Fool. Their authors may have different opinions and I think that's healthy.

My opinion has always been that any company that resorts to this type of click baiting and aggressive hawking is simply not a company I would deal with. Yes, people have different opinions about the same stock, but Motley Fool prints this contradicting junk under their name and we've all seen the complete opposite opinion offered on consecutive days. In that regard, they don't do themselves any favours.

ltr

 

[capricorn]

If the Motley Fools were really so good and trashing S&P, why do they need to peddle subscription all over the place. They should invest and run a hedge fund. Probably they themselves can not follow the advice they dish out.

I am sure there is a list of stocks from MF but then the credit for outperformance is your own and not MF as you executed and stuck to strategy.

 

[MrBlackhill]

My opinion has always been that any company that resorts to this type of click baiting and aggressive hawking is simply not a company I would deal with. Yes, people have different opinions about the same stock, but Motley Fool prints this contradicting junk under their name and we've all seen the complete opposite opinion offered on consecutive days. In that regard, they don't do themselves any favours.

ltr

I cannot disagree.

Personally, I just take the good and leave the bad. There's many good companies with bad marketing. We're more than ever in a world of click-bait titles. I can see through it and ignore that. I don't use Motley Fool as a tool to blindly buy stocks. I use it as a source of investment ideas.

In 2020, it worked well as I've found some stocks in those free & bad marketing articles/ads. I don't think my current screening would have found them. I want to study how I could find them by myself so I wouldn't have to find them in such articles.

It's Motley Fool free content that made me discover:

• WELL, up +300% in 8 months
• XBC, up +165% in 8 months
• GSY, up +80% in 7 months
• ERO, up +65% in 8 months
• KXS, up +45% in 8 months
• VMD, up +10% in 8 months
• REAL, down -20% in 3 months

GSY and KXS, I may have found them by myself, but not WELL nor XBC.

Also note that AT was a Motley Fool recommendation and it's up +1000% in 6 months.

But if you don't believe in stock-picking, it's ok. I'm not experienced and I may be wrong. You can go and see my thread below where I do a small test about some stock-picking I've done on my own in only a few hours and only backward analysis, no forward forecast. Just basic historical screening, nothing complicated.

Go in that thread below and make a bet about its outcome for the next 10 years, if you don't believe it'll beat the index.

Stock-picking, let's test it

Hi all, Let's test this and make bets. It may look similar to this thread or this thread but here the goal is to follow a specific portfolio fully documented and make bets on what will be its faith. If you want, as @Karlhungus suggested below, if you believe you are good at stock-picking, you...

www.canadianmoneyforum.com

 

[james4beach]

My opinion has always been that any company that resorts to this type of click baiting and aggressive hawking is simply not a company I would deal with. Yes, people have different opinions about the same stock, but Motley Fool prints this contradicting junk under their name and we've all seen the complete opposite opinion offered on consecutive days. In that regard, they don't do themselves any favours.

They churn out tons of portfolios and endless stock picks. I've illustrated here that they have had at least TEN previous stock-picking portfolios that were discontinued due to poor results.

Among their present-day portfolios, some of those will also have poor performance will be discontinued, just like their previous ones (like Drip Port) were discontinued. Then they will create more portfolios to replace them.

That's the game. Generate tons of portfolios / stock picks with clickbait titles. Heavily market the ones which happened to be successful, misrepresent yourself as genius stock-pickers, and use them to bring in more subscribers. Keep closing portfolios and generating new ones over the years.

The actual stock picks are garbage, and they have no stock-picking skill. This is one of the oldest tricks in the book.

 

[fireseeker]

(Cross-posted from the stock-picking thread because it belongs here)

In the debate between @Jimmy and @james4beach, they both may be right.

James appears to be taking the broad view -- multiple portfolios over different time periods to identify survivorship bias -- while Jimmy appears to be looking narrowly at the current portfolio and its current record.

I share James's skepticism, but Jimmy's confidence in the Fool portfolio's record may not be misplaced. The record may well be accurate. And for $99 it is certainly a low-risk way to gather investment ideas.

For anyone thinking about fully emulating the Fool portfolio, I would offer these considerations:
1) The portfolio record looks backward. There are no guarantees it will continue.
2) If you believe the Fool pickers can reliably crush the index going forward, ask yourself what most investors would do with such insight. Would they a) trade on it privately so as to make a killing? b) sell the formula to a hedge fund so as to make a killing? or c) peddle it to retail buyers at $99 a pop?
3) Assuming the answer above is option c), think about the implications of that. Whenever a new pick is made, that info will be sent to thousands of people simultaneously -- maybe tens of thousands of people. What happens to the price/opportunity then?

 

[Tostig]

The only Motley Fool articles I read are the free ones from Yahoo Finance. Before Yahoo stopped the comments, I read an article from Motley Fool that was contracted by the same Motley Fool author just a few days earlier on the same topic. So I posted a comment on each article referencing the other one.

Other than that, if I see a Motley Fool article that seems to merit recommending something, I'll dig deeper looking for the past five to ten years of revenue and earnings growth etc.

 

[Pluto]

(Cross-posted from the stock-picking thread because it belongs here)

In the debate between @Jimmy and @james4beach, they both may be right.

James appears to be taking the broad view -- multiple portfolios over different time periods to identify survivorship bias -- while Jimmy appears to be looking narrowly at the current portfolio and its current record.

I share James's skepticism, but Jimmy's confidence in the Fool portfolio's record may not be misplaced. The record may well be accurate. And for $99 it is certainly a low-risk way to gather investment ideas.

For anyone thinking about fully emulating the Fool portfolio, I would offer these considerations:
1) The portfolio record looks backward. There are no guarantees it will continue.
2) If you believe the Fool pickers can reliably crush the index going forward, ask yourself what most investors would do with such insight. Would they a) trade on it privately so as to make a killing? b) sell the formula to a hedge fund so as to make a killing? or c) peddle it to retail buyers at $99 a pop?
3) Assuming the answer above is option c), think about the implications of that. Whenever a new pick is made, that info will be sent to thousands of people simultaneously -- maybe tens of thousands of people. What happens to the price/opportunity then?

1) there are no guarantees in life on anything. It can help to think in terms of probabilities instead of guarantees.
2) Retail investors are not numerous enough to move the market in most stocks.

 

[MrBlackhill]

(Cross-posted from the stock-picking thread because it belongs here)

In the debate between @Jimmy and @james4beach, they both may be right.

James appears to be taking the broad view -- multiple portfolios over different time periods to identify survivorship bias -- while Jimmy appears to be looking narrowly at the current portfolio and its current record.

I share James's skepticism, but Jimmy's confidence in the Fool portfolio's record may not be misplaced. The record may well be accurate. And for $99 it is certainly a low-risk way to gather investment ideas.

For anyone thinking about fully emulating the Fool portfolio, I would offer these considerations:
1) The portfolio record looks backward. There are no guarantees it will continue.
2) If you believe the Fool pickers can reliably crush the index going forward, ask yourself what most investors would do with such insight. Would they a) trade on it privately so as to make a killing? b) sell the formula to a hedge fund so as to make a killing? or c) peddle it to retail buyers at $99 a pop?
3) Assuming the answer above is option c), think about the implications of that. Whenever a new pick is made, that info will be sent to thousands of people simultaneously -- maybe tens of thousands of people. What happens to the price/opportunity then?

I agree on the part where you mention we are just debating something that is not black or white.

What you guys don't see is that once you have a subscription, you have a list of all their Best Buy Now, Buy, Hold and Sold. You see on what date they said to Buy and on what date they Sold.

It's fully transparent because you see all the stocks that have lost money since their buy signal. For instance, on October 2013, they said to buy SCL.TO. The stock then soared +50% in a matter of a few months... until it crashed. They never sent a Sold signal on it, just a Hold. So it's currently at -90%. On the other side, they have sent a Buy signal for SHOP.TO on March 2016 and it's now at +4000%. They have even sent another Buy signal for SHOP.TO in February 2019 and it's now at +513%. You also see stocks which where bought & sold, for instance WPM.TO bought in April 2014 and sold in April 2020 for +136%. Every month, one Canadian stock and one US stock is added to the list. If ever they sell, you'll have to watch. Out of the 87 past picks (87 months), they have sold 19 times. That means they are still holding most of their picks of the past 7 years.

With that information, I can do the ultimate test.

$1000 in every stock they have picked every month on the Canadian side since October 2013 vs $1000 every month in XIU.TO
Motley Fool current value at the end of December 2020 : $156,436
XIU.TO current value at the end of December 2020 : $115,027
The current value after 7 years is 36% higher than XIU.TO

$1000 in every stock they have picked every month on the US side since October 2013 vs $1000 every month in SPY
Motley Fool current value at the end of December 2020 : $189,010
SPY current value at the end of December 2020 : $150,554
To be fair, here's QQQ current value : $215,630
But they've invested in both NASDAQ and NYSE, so here's VTI current value : $151,989
The current value after 7 years is 24% higher than VTI

There's also another portfolio to which I have access. Their monthly picks are documented since January 2018.
Motley Fool current value at the end of December 2020 : $64,656
XIU.TO current value at the end of December 2020 : $43,292
The current value after 3 years is 49% higher than XIU.TO

On the US side
Motley Fool current value at the end of December 2020 : $65,893
SPY current value at the end of December 2020 : $50,260
VTI current value at the end of December 2020 : $51,104
QQQ current value at the end of December 2020 : $62,360
The current value after 3 years is 29% higher than VTI

Now, I subscribed to Motley at the end of December 2020 because I want to use it as a source of investment ideas and to chat on the forums with other stock pickers.

After all, what is few hundred bucks when I've made a few thousands in profits this year from screening through their articles as investment ideas?

I agree with all of you that I don't like their marketing, their click-bait titles, their contradictory free articles (they have higher quality articles for subscribers). Also, if you are wondering how their make money when they offer a service for only $100? First, that's a discount for new members, afterwards it's more like $300 if I recall correctly. Second, they spam with "opportunities" which all have a price tags of a few hundred dollars each. So, yes, their marketing is about fooling the gamblers and all the people who buys into get-rich-quick scams. I don't like that, obviously. But as I said, I can see through that and ignore it, and just get the best of what I need and what I want to test and learn.

 

[fireseeker]

2) Retail investors are not numerous enough to move the market in most stocks.

For sure.
But if the Fool strategy can reliably beat the market, big money will also pony up $99 to take advantage of the slam dunk. As we know, about 90% of equity mutual funds fail to beat their benchmark over 10-year periods.

If hedge funds, prop desks and institutional money managers are not signing up with MF, maybe we should be asking why.

 

[fireseeker]

With that information, I can do the ultimate test.
...
The current value after 7 years is 36% higher than XIU.TO
...
The current value after 7 years is 24% higher than VTI
...
The current value after 3 years is 49% higher than XIU.TO
...
The current value after 3 years is 29% higher than VTI

No argument about this. Looking backward, these particular Fool returns are awesome.

Here is another list of awesome stock pickers:
Top Performing Canadian Mutual Funds in 2020
YTD returns range from 66% to 95%!

It is easy to find funds/pickers that have extraordinary records, even ones that go back a decade.
The hard part is finding ones that will keep it going.

 

[james4beach]

I don't think it's wise to gloss over the survivorship bias. It's not just a small detail... it's the heart of this entire game.

When I say they are being misleading, I'm not saying they are telling any lies about their current (surviving) portfolio. They are accurately tracking it, fully transparent.

That's not the misleading part. The problem is the 10+ portfolios they tried before and abandoned. Of their current portfolios, they will eventually abandon one of these too. It might even be the Advisor list you guys are paying for.

But anyone wise to these methods knows better. That's why these guys are peddling their stock pick to retail investors with flashy marketing for the low low price of $99, instead of selling the advice to hedge funds or Wall Street. It's because nobody on Wall Street will buy it, because they are wise to the trick.

But here's the great news. Now YOU are wise to the trick too! You're welcome! lol .... you don't care, I know. Go pay for the subscription.

 

[Pluto]

For sure.
But if the Fool strategy can reliably beat the market, big money will also pony up $99 to take advantage of the slam dunk. As we know, about 90% of equity mutual funds fail to beat their benchmark over 10-year periods.

If hedge funds, prop desks and institutional money managers are not signing up with MF, maybe we should be asking why.

They probably are not signing up. They probably already know about all those stocks.
The purpose of institutional money is to make money for the institution, not the client.
That's why I buy shares in the institution, and don't pay for advice at the institution. The tellers often try to get me an appointment with an advisor to manage the cash in my account. I tell them to have a look at my stock account. They do and blush. I tell them I do it myself. they blush more. I'm tempted to ask the teller for an interview to get a job as a money manager/advisor because there are endless numbers of naïve people to make money off of. Trust me, these advisor's are really sales people, and they get noticed by management based on how much revenue they bring the institution, not on how much money they make for the client.

 

[james4beach]

If the Motley Fools were really so good and trashing S&P, why do they need to peddle subscription all over the place. They should invest and run a hedge fund. Probably they themselves can not follow the advice they dish out.

The Motley Fool people actually did create two mutual funds and an ETF, and the performance of all of them is only about average (index-like).

In reality, they are not able to "trash" the S&P 500 index, because they don't actually know how to pick stocks. They are playing a multiple-portfolios game. It's incredibly important to learn this survivorship bias trick.

 

[MrBlackhill]

The hard part is finding ones that will keep it going.

I agree, but I prefer doing +30% CAGR during 15 years than doing +15% CAGR during 25 years.

Because in the first case I'll retire after 15 years.

I prefer outperforming during a shorter timespan, just enough to retire.

 

[depassp]

That's why I buy shares in the institution

Which institution?

 

[Pluto]

Which institution?

Canadian bank known for a "Wealth Management" division.