Farewell, Fool Portfolios

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By David Gardner and Tom Gardner
February 18, 2003

Dear Fools:

We've invested together for a long time. We created our forum of investors writing for investors to educate each other on investing strategies, have some fun, and ultimately, enrich ourselves and the lives of our families. And, as we've learned together from successes and mistakes, our thinking as investors has continually evolved.

At each turn, we've done our best to offer you more of what you wanted. Today, we'd like to share with you some changes to our investing strategies area that will allow us to continue that trend.

First, we're proud to say that The Motley Fool's investing strategies have never belonged solely to David and Tom Gardner. We've been blessed to work with a lot of brilliant minds and talented teachers. You know them. People like Bill Mann (TMF Otter), Matt Richey (TMF Matt), Tom Jacobs (TMF Tom9), Jeff Fischer (TMF Jeff), and others have become popular voices on Fool.com. We want to give you the chance to get to know them as well as you have us, so we'll be creating more opportunities for them to share their own investment ideas with you. You can expect to see more provocative content reflecting a much broader base of companies and ideas.

In order to do this well -- and give our folks the freedom to write about the companies and approaches they're most interested in -- we've decided to discontinue our real-money portfolios and free up the resources required to manage the investments, balance the returns, and research the companies in the Rule Breaker, Rule Maker, and Drip ports. While we remain dedicated as ever to the strategies and to delivering responsible investing advice and sound financial education, we don't feel that continuing to operate real-money portfolios is the most direct path to that end.

The purpose of our portfolios has been to teach. Period. Since the original Fool Portfolio launched on August 4, 1994 with $50,000 of real money, we've demonstrated how some real investors -- relatively ordinary people like ourselves -- can manage their money better than many pros on Wall Street. Even when they've beaten the market averages, our returns have been secondary, and we'll discuss them at length and compare them to the market indexes in our final portfolio reports this week and next, but the CliffsNotes version is that two of our three ports have beaten the S&P 500 (dividends added):

             Date of  Internal Rate of Return 
Portfolio     Birth     Portfolio S&P 500*
Rule Breaker Aug. 94    +20.08%   +9.14%
Drip         July 97    + 1.04%   -1.01%
Rule Maker   Feb. 98    -11.90%   -7.10%

*Dividends added

Through good times and bad, we've kept our eyes on the long term and stood by our decisions. We also announced our trades in advance, showed our research, and took our lumps when they came, creating our own little fish bowl meant to remind people of the importance of accountability and disclosure that's too often non-existent in the world of finance. Put simply, while we've made some mistakes, we're proud of what we've accomplished here.

Though we won't continue tracking the portfolios online, rest assured that we will continue to employ the Rule Maker, Rule Breaker, and Drip strategies on the site and in our newsletter products. And we pledge to incorporate everything we've learned over the past nine years into our new programming.

Actually, we've already started. Our team of investing analysts has been sharing its best stock ideas in The Motley Fool Select since 2001 and we Gardners are devoting more and more energy to our own Motley Fool Stock Advisor newsletter. We think these formats are valuable for a number of reasons, including that they allow us to present our thinking in greater detail -- much greater than a weekly column will allow. Judging from our growing subscription count, we think you agree. 

In these and across all of our platforms -- our daily personal finance and investing advice on Fool.com, our national newspaper column, and our radio show on NPR -- our mission to help people make better financial decisions continues in earnest.

Keep your eyes glued to this space. Over the next two weeks, we'll wind down our coverage of the ports with reflections on what we've learned about the strategies and our current thinking on each company we hold.

Then we're moving full steam ahead with programming enhancements on Fool.com. We'll be at your service, providing rapid-fire commentary throughout the day in our Motley Fool Take and in brand new columns written by your favorite Fool writers. We hope you'll enjoy it all and find it very Foolish.

-- David and Tom Gardner

P.S. As always, we welcome your feedback on our Improve the Fool discussion board. If you have questions, check out today's Rule Breaker Portfolio report for a more in-depth FAQ.