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'97 Features Archive

Nothing dispels enthusiasm like an admission fee. -- Kin Hubbard

The Fool View on Wade Cook
by David Gardner

From day one, a prominent aspect of our total mission at The Motley Fool has been to reform the financial industry wherever and whenever Foolishly possible. Wherever we see bunk or slanted numbers, misleading advertisements or empty promises, we blow our Foolish trumpets and call readers to arms. Industry-wide examples include, of course, "full-service" brokerage firm account-churning and chronic mutual-fund underperformance. On a more specific level, consider also our campaigns against Dan Dorfman's work on CNBC and Elaine Garzarelli's newsletter. Elaine's newsletter is still going, though The Wall Street Journal recently reported that her publisher is considering discontinuing it due to the falloff in subscriptions. (Any surprise there?) Dorfman is no longer employed by CNBC, and the network has not renewed his hype hype hype feature (much to the dismay, perhaps, of many daytraders). Indeed, flip through a copy of The Motley Fool Investment Guide and look at page 20 and you'll see that it now reads like ancient history, just two years after it was written. That's because everything we criticized CNBC for, on that page, has been discontinued... including, prominently, their "Buy Sell Hold" segments. It's a better network today, serving individual investors far better than even a year ago.

You may or may not have heard of a fellow named Wade Cook. One of the scariest experiences I have had at Fool HQ is occasionally receiving mail from people who say, "There's this guy Wade Cook who conducts Wall Street seminars and I'm thinking of going. What do you think?" It's rather like writing, "There's this boat called the Titanic and I'm thinking of a sleeper cabin. What do you think?" Cook is the fellow who now has two self-published bestselling books on stocks. He asserts that people can double their money in the stock market every 2 1/2 to 4 months, using the market as "a money machine." Take the time to compound out those returns as Randy Befumo did a year ago July (Lunchtime News of 7/16/97) and you'll see that anyone who starts with even just a couple of hundred bucks would become the richest human being of all-time within a couple of decades.

This is perhaps the emptiest promise I've ever seen in financial publishing; apparently, America is still not well enough educated to be ignoring it.

Listen, we firmly believe that if you've read Cook or subscribed to any of his notions (or paid the entrance fees to his "seminars" -- sorry to cheapen the word), you may need to seriously reconsider your thoughts about long-term investing and your financial future. Meantime, the company that Cook runs actually invests its own excess cash in real estate. Given that you can double your money in the stock market every few months, why would you do anything but? Right?

next page: Book Review: Wall St. Money Machine


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