The Best Stocks to Buy in This Market

You're probably getting all sorts of conflicting messages these days.

On the one hand, you have gloom-and-doom predictions from luminary economists like Nouriel "Dr. Doom" Roubini, calling an S&P 500 bottom possibly as low as 600 -- more than 20% below yesterday's close.

On the other hand, you have the world's most respected investor, Warren Buffett, saying that now is a good time to buy. Buffett is also putting new money to work, buying shares of Burlington Northern (NYSE: BNI  ) and Ingersoll-Rand.

What's a Fool to do?
With so much debate over what has been roundly dubbed "the worst financial crisis since the Great Depression," I wanted to actually look back at how various strategies fared during each of the other financial crises since the Great Depression.

To get started, I turned to trusty data from Ibbotson Associates, a leading authority on investment research. I calculated the historical returns for cash, bonds, and stocks for those who invested the year following the start of each recession -- exactly the point at which we find ourselves today -- and measured the five-year annualized return for each period.

Here are the results:

Recession

T-Bills

Corporate Bonds

S&P 500

Inflation

March 2001 - November 2001

2.3%

7.8%

6.2%

2.7%

July 1990 - March 1991

4.3%

12.2%

16.6%

2.8%

July 1981 - November 1982

8.6%

22.5%

19.9%

3.3%

January 1980 - July 1980

10.3%

17.9%

14.7%

4.9%

November 1973 - March 1975

6.2%

6%

4.3%

7.9%

December 1969 - November 1970**

5.8%

6%

3.2%

6.9%

April 1960 - February 1961

3.1%

3.8%

13.3%

1.3%

August 1957 - April 1958

2.4%

3.6%

13.3%

1.3%

July 1953 - May 1954

1.9%

1%

22.3%

1.5%

November 1948 - October 1949

1.5%

1.9%

17.9%

2.2%

February 1945 - October 1945

0.8%

1.8%

9.9%

6.6%

May 1937 - June 1938

0.1%

3.8%

4.6%

3.2%

August 1929 - March 1933

1%

8.1%

(9.9%)

(4.8%)

Average return

3.7%

7.4%

10.5%

3.1%

Frequency of outperformance

8%

38%

54%

NA

*Data from Ibbotson Associates, Salomon Brothers Long-Term High-Grade Index, National Bureau of Economic Research, Consumer Price Index, author's calculations.**Returns calculated from 1971-1975.

Rule your recession
Three lessons stand out from this data:

  1. Stocks outperform bonds and T-Bills most of the time, and by large amounts. And remember, these are just averages -- stronger index components like PepsiCo (NYSE: PEP  ) and Procter & Gamble (NYSE: PG  ) did even better than the S&P 500 average the last time around.
  2. Unless you need money or plan on investing it, don't park your capital in cash or Treasury bills. If you're bearish enough on stocks to avoid the stock market, history shows that it's much better to be in a diversified batch of long-term, high-grade corporate bonds.
  3. The only period the S&P 500 lost money was the 1930-1934 deflationary death spiral, when deflation ran a chilling 5% annually. Inflation currently sits around 0.4% annually, but so long as it doesn't plunge well below zero and remain there -- something even Roubini, the most prominent stag-deflation advocate, doubts will happen -- investors who are looking to buy a diversified basket of stocks today are well-positioned.

But that's not the whole story
Various studies -- including one of my own -- show that small caps tend to outperform their larger counterparts by a significant margin, particularly in recessions. To confirm this, I ran the numbers once more to include the smallest quintile of stocks:

Recession

T-Bills

Corporate Bonds

S&P 500

Small Stocks

March 2001 - November 2001

2.3%

7.8%

6.2%

15.2%

July 1990 - March 1991

4.3%

12.2%

16.6%

24.5%

July 1981 - November 1982

8.6%

22.5%

19.9%

17.3%

January 1980 - July 1980

10.3%

17.9%

14.7%

18.8%

November 1973 - March 1975

6.2%

6%

4.3%

24.4%

December 1969 - November 1970**

5.8%

6%

3.2%

0.6%

April 1960 - February 1961

3.1%

3.8%

13.3%

20.3%

August 1957 - April 1958

2.4%

3.6%

13.3%

16.7%

July 1953 - May 1954

1.9%

1%

22.3%

23.2%

November 1948 - October 1949

1.5%

1.9%

17.9%

11.5%

February 1945 - October 1945

0.8%

1.8%

9.9%

7.7%

May 1937 - June 1938

0.1%

3.8%

4.6%

10.7%

August 1929 - March 1933

1%

8.1%

(9.9%)

(2.4%)

Average return

3.7%

7.4%

10.5%

14.5%

Frequency of outperformance

0%

23%

15%

62%

*Data from Ibbotson Associates, Salomon Brothers Long-Term High-Grade Index, National Bureau of Economic Research, author's calculations.
**Returns calculated from 1971-1975.

Small stocks outperformed T-Bills, bonds, and the S&P about two-thirds of the time -- and they did so by a ridiculous margin. 

But how much dough are we talking about?
A few percentage points might not seem like much, but remember, these are annualized figures. Here's how much money $1,000 invested and held for each five-year period would be worth today, adjusted for inflation:

Asset

Under the Mattress

T-Bills

Corporate Bonds

S&P 500

Small Stocks

$1,000 Would Be Worth...

$145

$1,505

$13,602

$77,367

$808,984

The data over 13 recessionary periods and various academic studies reveals a powerful lesson: Small stocks really are the best stocks to consider buying in this market. 

Why are small stocks so great?
There are many reasons for why all of the market's best stocks have been small caps. Among the three most prominent are:

  1. Small caps attract less coverage from major brokerage houses and consequently are more likely to be mispriced.
  2. Smaller stocks have more opportunities for growth.
  3. Smaller companies have the ability to be nimbler in tricky situations. Starbucks (Nasdaq: SBUX  ) has been handling the complex logistics of closing 8% of its more than 7,000 U.S. stores. On the other hand, if tiny Buffalo Wild Wings had to close 8% of its 575 stores and reallocate resources, it could do so relatively easily.

These may also explain why all of the top 30 performers that emerged from the 2001 recession were small or mid caps, including USG, (NYSE: USG  ) , Coach (NYSE: COH  ) , and Research In Motion (Nasdaq: RIMM  ) , which each rose more than 700%.

Small is good
At Motley Fool Hidden Gems, we look exclusively for niche businesses with wide market opportunities and limited analyst coverage. That's where you're going to find the market's best stocks today. So far, our strategy is paying off -- the newsletter service's average pick is beating the broader market.

If you'd like some help finding superior small-cap ideas, you can check out all of our Hidden Gems stock research, as well as our top five small caps for new money now, free for the next 30 days.

Click here for more information.

Already a Hidden Gems subscriber? Log in here.

Ilan Moscovitz owns shares of Buffalo Wild Wings, a Hidden Gems recommendation. Coach and Starbucks are Stock Advisor selections. Starbucks and USG are Inside Value picks. PepsiCo is an Income Investor recommendation. The Motley Fool owns shares of Buffalo Wild Wings and Procter & Gamble. The Fool's disclosure policy is the best disclosure policy to read at bedtime.


Read/Post Comments (58) | Recommend This Article (276)

Comments from our Foolish Readers

Help us keep this a respectfully Foolish area! This is a place for our readers to discuss, debate, and learn more about the Foolish investing topic you read about above. Help us keep it clean and safe. If you believe a comment is abusive or otherwise violates our Fool's Rules, please report it via the Report this Comment Report this Comment icon found on every comment.

  • Report this Comment On March 13, 2009, at 6:39 PM, kartha1 wrote:

    It's all nice to see tabulated performance data.

    But is the past any indicator of the future performance?

    I've been bit too many times to believe this any more.

  • Report this Comment On March 13, 2009, at 7:04 PM, DocsStock wrote:

    So, what did I pay for if I have to pay still more for the real information or stock advice? This is what almost drove me not to renew my subscription. Truly disappointing.

  • Report this Comment On March 13, 2009, at 9:34 PM, pumba2003 wrote:

    With regards to Buffalo Wild Wings, on what does the author base his (?) assumption that they could close and reallocate assets more efficiently or effectively than a larger corporation?

    Anyone can close locations and "reallocate" assets, but it takes a company with a proper set of values to extend severance packages to those individuals who could not be transferred to a new location. That takes 2 things, a company with its priorities in the right place, and a company with substantial resources ie. multiple locations in each municipality, significant cash resources, an established support network, etc.

    Sometimes being bigger does have benefits.

  • Report this Comment On March 14, 2009, at 12:45 AM, tkochan wrote:

    I'm with you, DocsStock... I was annoyed that SIGNING UP wasn't enough to see the articles. Otherwise, I likely would not have. If I were in your position, I'd be pretty ticked that I paid for this nonsense.

  • Report this Comment On March 14, 2009, at 1:16 AM, PrestonCheek wrote:

    Thanks Ilan,

    thats good information either way. I still think a portfolio of mostly small caps is better, I do have some Bonds but I think at my age right now you can't go wrong putting every dime you can into smaller companies, of course you have to do your homework.

    In todays market a lot of stocks have become small caps because of the market downturns, I think if you cannot invest a little at a time now then you might be better off staying out the rest of your life. To many people will forget about the market now, then a few years from now start hearing all the good news and decide to get back in when things are higher, you need to decide if it's for you or not I guess.

    In any case keep up the good work.

    Preston

  • Report this Comment On March 14, 2009, at 1:51 PM, bikingdoc wrote:

    this type of advice is what drives the small investor nuts--on one hand, this advice strongly favors small caps for the long run; other "experts" just as convincingly recommend dividend-paying large companies as best for the long term

    what's a little guy to do?

  • Report this Comment On March 14, 2009, at 2:40 PM, TMFDiogenes wrote:

    hey bikingdoc,

    Great question. I think the most important thing in choosing any investment or investing approach is to ask if you feel comfortable with it. Whatever style(s) you choose fits your own disposition. Otherwise you won't enjoy investing and probably won't do as well with a strategy that isn't aligned with how you think. For some reason, investing in small caps resonates with me.

    On the other hand, I've been reading about how dividend paying stocks do extremely well over the long haul and are especially attractive during down markets when they yield more and you can reinvest at lower prices. I don't have very many large cap dividend payers, but that strategy is beginning to make more sense to me too, so I've decided I'd like to branch out more into more dividend payers.

    So to answer your question from my experience, pick whichever strateg(ies) you 1) find convincing, 2) feel comfortable with, and 3) fit how you like to think. If you like a couple different proven strategies, you can use both.

    Hey Preston,

    "Too many people will forget about the market now, then a few years from now start hearing all the good news and decide to get back in when things are higher."

    That's a great point. It's really important for all of us to keep things in an appropriate historical perspective and try as much as we can to think rationally about investing -- especially now. Glad you liked the article.

    Thanks,

    Ilan

  • Report this Comment On March 14, 2009, at 3:23 PM, Madgear wrote:

    Interesting research.

  • Report this Comment On March 14, 2009, at 3:50 PM, Goldie1939 wrote:

    I, too, feel duped. What are the best stocks to buy in this market??? Am I missing something other than more money to pay? I feel you have done the same thing charity organizations do - have the customer pay - give them a thank you - and then ask for more. Wrong..........................

  • Report this Comment On March 15, 2009, at 9:12 PM, JibJabs wrote:

    You can lead a fool to water . . .

  • Report this Comment On March 16, 2009, at 9:22 AM, ggkandy wrote:

    This is right, small stocks are so power in this market

    Here's [url=http://top5stocks.blogspot.com/2009/03/top-10-stocks-for-rec... 10 Stocks[/url] for the Recovery from America's Leading Advisors.

    http://top5stocks.blogspot.com/2009/03/top-10-stocks-for-rec...

  • Report this Comment On March 16, 2009, at 9:23 AM, ggkandy wrote:

    This is right, small stocks are so power in this market

    Here's top 10 Stocks for the Recovery from America's Leading Advisors.

    http://top5stocks.blogspot.com/2009/03/top-10-stocks-for-rec...

  • Report this Comment On March 20, 2009, at 11:30 AM, Jodo9 wrote:

    This misleading headline is so typical of MF. Where is the list of the Best Stocks to buy in this market????

  • Report this Comment On March 20, 2009, at 12:36 PM, boydproctor wrote:

    Docs Stock wrote: "So, what did I pay for if I have to pay still more for the real information or stock advice? This is what almost drove me not to renew my subscription. Truly disappointing"

    My sentiments exactly, and that's why I did not renew.

  • Report this Comment On March 20, 2009, at 12:56 PM, ReillyDiefenbach wrote:

    Things you'll never read here:

    Best stocks to buy? None until the economy improves.

  • Report this Comment On March 20, 2009, at 1:38 PM, gpolitte wrote:

    Subscribing to MF has ben a waste of money. No real meat to any of the articles just a hook to get you to spend more.

  • Report this Comment On March 20, 2009, at 2:35 PM, JesterWOCourt wrote:

    Sometimes I read some good anti-MF comments. Often not, and I find your own comments laughable. One, never does the title say there's a list of specific stocks. The article says the best stocks are small caps. Would you like the author to list all of the small caps? Two, many others miss the point of TMF. I parrot myself saying this as much as TMF does... "Educate, Amuse, Enrich". "Dictate" is not one of their core values. Companies can sometimes be greedy, nasty, self-centered ventures but more often than not, as I had experienced, it's the customers of companies that are greedy, nasty, and self-centered. Wouldn't it be great if TMF threw some of you guys out or blocked you from their service instead of *some* of you guys (not all of the naysayers) trying to hang them out to dry. Boy knows I would have loved to have done that to customers back in my restaurant and retail days... because some customers aren't right... they just don't get "it".

    Unfortunately for TMF - I won't be consistantly resubscribing to each and every product. Why? Because they've educated me enough to make my own decisions. I could definitely go for intermittent "Higher" and "Continuing" education, though.

  • Report this Comment On March 20, 2009, at 3:34 PM, DrDucke wrote:

    Another Fool header waste of time. You are hurting your reputation by continue to "sucker" viewers this way. People notice these things and remember.

  • Report this Comment On March 20, 2009, at 5:25 PM, FirstTimeSub wrote:

    I was a first time subscriber to the Fools, but will be no more. Pay more???????? Not a chance!!!!!!!!!

  • Report this Comment On March 20, 2009, at 5:58 PM, smileandlaff wrote:

    Hope the Fool is reading and listening to these comments about feeling discouraged with their subscription. I, too, have found my subscription confusing in that i'm not exactly sure what I bought.

    I signed up to this service just this year in hopes that I might gain some insights that will help me gain a stronger position that just sitting on my laurels during our recession and inevitable upswing. But, IMHO, I've gotten more help from Jon Stewarts rant on CNBC's rhetoric.

    Combined with a daily stream of MF spam, I don't know which articles/advice is golden and which are going to get me fleeced. And, at the end of every one there seems to be a request for me to sign up for something else or pay more for something that I feel might get me right where I am now: no where.

    Confused and Dismayed in Seattle...

  • Report this Comment On March 20, 2009, at 7:34 PM, georgetag wrote:

    I too, am a little dismayed. I subscribe to two news letters because I thought the MF could help me beat the market. I've been investing and learning along the way, but have yet to beat the market. Now all the mail I get is the MF trying to sign me up for more and expensive news letters. If all I'm able to do with these news letters is follow the market at best, I'm beginning to wonder if it's worth what I'm paying for now. Are the products I have now not getting the attention I originally signed up for when these new products come out? I guess I'll soon find out.

  • Report this Comment On March 20, 2009, at 10:45 PM, pruplefool wrote:

    I agree with most of you. I have joined many of the newsletters but it seems like every time I am interested in an advertised "teaser" it is not for any of the newsletters I belong to and I am asked to pay for yet another subscription. It is beginning to seem like just a way to get more money. I have been led to the water and have been drinking too much. I doubt that I will re-subscribe to many of the newsletters.

  • Report this Comment On March 20, 2009, at 10:50 PM, mikeineatonville wrote:

    It has been my belief (before the current "crisis"occured that you actually provide no real service to your subscribers. You headlines are misleading, and frankly, much of your advice is rather poor. Your real intent is to sell some new contrived subscription to your subscribers. Frankly, I regret having spent any money for your advise - it is poor and very often ill advised .

    Mikej@mashell.com

  • Report this Comment On March 20, 2009, at 10:58 PM, lylethe4 wrote:

    I agree its the classic bait and switch. Of course we want to know the best stocks. So tell us. I also feel I have been duped by buying your stock service and then being solicited each week for more and more micro stock newsletters while being teased in your main newsletters. We are all not fools to see what is happening. Especially with your latest solicitation for Duke Street. Who cares where your building is or its history. Just give us the honest advice we originally signed up for not smoke and mirrors. Very disappointing and very unprofessional.

  • Report this Comment On March 20, 2009, at 11:29 PM, JGWhitworth wrote:

    I second, or third, or fourth, or whatever, the sentiment. I'm a newbie here, and I absolutely HATE the teaser lines and multiple subscriptions. I feel like I've paid to participate in a constant infomercial, or the local news where all you want to see is the weather and they keep flashing the weathergirl up 20 times with nothing and you finally end up missing it anyway. If this subscription automatically renews, I will be pitching a big one.

  • Report this Comment On March 20, 2009, at 11:31 PM, JGWhitworth wrote:

    I second, or third, or fourth, or whatever, the sentiment. I'm a newbie here, and I absolutely HATE the teaser lines and multiple subscriptions. I feel like I've paid to participate in a constant infomercial, or the local news where all you want to see is the weather and they keep flashing the weathergirl up 20 times with nothing and you finally end up missing it anyway. If this subscription automatically renews, I will be pitching a big one.

  • Report this Comment On March 20, 2009, at 11:57 PM, Fryatt wrote:

    JGWhitworth , contact them before your suscription expires,I was rather ticked off my subscription to MDP renewed automatically. No advance notice was given. You would think that they could at least send out a renewal notice 2 weeks prior to let you know it was expiring with a yes or no box for renewal. Would that not be the ethical way to go about it ? Comments from fool headquarters please !

  • Report this Comment On March 21, 2009, at 1:12 AM, lihgv wrote:

    LOL !!!

    Hey fools !!!

    I have already invested the last 3 years in stock that was supposed to double in 5 years. Right now I am sitting on a huge lost. I have invested 140 000$ of hard earned money in these stocks and now it is worth 36 000$.

    Do you really think I am impressed with a 15% or a 20% annual return. To get my money back I need a 60% annual return over the next 3 years.

    And if I want to double my invested money over 5 years like you said 3 years ago, I need a 180% annual return over the next 2 years.

    How about that 10 000$ in SCSS ?

    How about that 10 000$ in FMD ?

    How about that 10 000$ in OYOG ?

    How about that 5 000$ in PAC ?

    How about that 5 000$ in VLCM ?

    How about that 5 000$ in HURC ?

    How about this 5 000$ in CRYP ?

    Of course the 5 000$ in BLWD was good but I think you forgot to talk about all those 5 000$ and 10 000$ of hard earned money we lost in other stocks.

    And now, you say I can be confident to take new money of my hard earned dollars (after taxes) and invest it in the same stocks ???

    Are you kiddin me ?

    Hope I'll get a comment from the staff.

    lihgv

    P.S.: By the way, all these figures are in U.S. dollars and I bought it from CDN dollars at an average of 1CDN$ = 0.75US$, another hit on the currencies.

  • Report this Comment On March 21, 2009, at 1:18 AM, trenton1ryan wrote:

    < What are the best stocks to buy in this market???>

    Check out OKS, EPD, PAA, TPP, and KMP. We will see multiple bottoms during this recession (depression?? maybe...) and you should get paid well if you are brave enough to try and hold someone's stock through all of this. Energy will become a much bigger deal when inflation returns, and NatGas demand will increase when we finally accept (and act on) the fact that we will have to compromise in 'going green' and pick the least worst of the alternatives (plus, we-USA-hold the largest reserves of NG in the world).

    Divvies from MLP's are the way to go imnsho. Read up on these and the benefits of MLP's, particular for IRAs. Do your own research and don't pay anyone to do it for you. It's YOUR $. Step up to the plate and educate yourself so that there's no need to piss and moan on a message board ever again.

    gla

  • Report this Comment On March 21, 2009, at 5:42 AM, mmkellman wrote:

    Very interesting and thought provoking comments from all of the fools subscribers. I often wonder if all the teaser headlines from TMF boys were so great why do they need to sell the various subscriptions?

    There is much fear, disgust, corruption and greed in the market for any of us to make any sound decisions on what or when to buy. I am constantly getting great stock picks in my email from all the so called experts who claim how much their making. I am sure you receive the same. I no longer buy and hold but buy and sell solid companies short term. Seems to work better than the advice I get from the TMF guys and its free except for fees. I will not be renewing my subscription. Love the comment from a subscriber not caring where Duke Street or what kind of building. Very funny. Remember Fools. There are 2 types of speculators. Those who have to much money to invest and those who don't.

  • Report this Comment On March 21, 2009, at 8:27 AM, briboe wrote:

    Congress should be investigating The Motley Fool for fraud, or at least deceptive and misleading advertising.

  • Report this Comment On March 21, 2009, at 8:50 AM, rdhvet wrote:

    If I'm supposed to get "Educated, Amused, Enriched", can I get a 66% discount on my subscription? Actually, the subscriber comments are more ammusing than the constant barrage of TMF Infomercials, so I think I'll be dropping my subscription anyway.

  • Report this Comment On March 21, 2009, at 8:54 AM, falconjack wrote:

    Perhaps the title is misleading if you read it and expected a list. They should have put the word "type" in. However, it was quite clear that it was talking about what type of stocks, not individual stocks, should be the area for you to consider investing in, when you come to the second chart.

    I am a subscriber to the stock adviser because that is the type of stocks and investing that I want to do. If I wanted to focus on small caps, than I would have chosen hidden gems,etc. Reading these comments it sounds like you feel that because you subscribed to one, that you should have access to all. This is no different than your cable tv. you don't get the movie and sport packages, unless you pay for them.

    All these kinds of articles do is point you in a direction to consider. Its your choice what to do with it. If you want to persue this avenue, they have a service that they offer, for a price. Or you can persue it and do all the research and homework yourself and pick your own stocks, or do nothing at all. This is a business and this is one of the ways in which this business makes it's living, by selling a service. No different than what you do at your job, selling your services to the employer. Sounds like capitalism. If you don't like the way the Motley Fool does business, its your choice to leave. There are hundreds of other people out there who also have stock subscription newsletters, many who charge considerably more

  • Report this Comment On March 21, 2009, at 9:09 AM, sillybilly12 wrote:

    I have to say that I am shocked by all the hate in here. I have one sub with TMF and that is the Stock Adviser. I like it but don't use it or any of the recommendations to buy stock with out doing my own research. I have found that TMF is best used to generate new ideas to analyze and then to take action. It would be foolish, yes that is a small f, to use your "hard earned" cash and just buy what someone else tells you to. This article should spark your thinking caps and get you to research some small caps on your own. TMF is a service that I have found valuable. I have never looked at it as a way to get rich but rather as a service that will help enrich my mind so I can make better investing decisions on my own.

  • Report this Comment On March 21, 2009, at 9:22 AM, Gtrace wrote:

    Investor's Business Daily and their techniques are still the best place to start your own stock research. It's amazing how close the Motley Fool's marketing has progressed towards those dastardly brokers we all loved to hate.

  • Report this Comment On March 21, 2009, at 9:44 AM, marktsgooch wrote:

    Whenever I read numbers about small stocks historically beating bigger ones, one question pops up.

    Are you only considering small stocks that survived, vs big stocks that survived?

    Or is this a real apples-to-apples comparison?

    How have you avoided this trap in your numbers?

    Thanks

  • Report this Comment On March 21, 2009, at 10:46 AM, n71dj wrote:

    I have waited, waited, and waited for some sound advice from MF.

    I will wait no more.

    Cancel my subscription and send me a refund.

  • Report this Comment On March 21, 2009, at 10:54 AM, Retlew wrote:

    I sold my mutual funds at the end of December 2007 because the S&P 500's 200 daily moving average was pierced from above by the trendline of the S&P 500, there hadn't been a Christmas rally, and neither had there been a post-Christmas rally. I figured that those signs pointed to a drop. Of course, I didn't know how big of a drop. My loss is about 8%. The way things look, by early/late summer, the bottom may have been reached, or, at least, another big slide is unlikely to happen. Then, I'm going to go back into the market again.

    We live in a time of insecurity. Pensions are done away with; security is nearly a thing of the past. I do not chase after big returns. ETFs and index funds fit my bill just fine. When the market lifts, they will make good money; where they shine is the trending/timing element. Using moving averages, I have been able to evade the knockout and am ready to ride the rising tide whenever it will come again.

    I do not trust others's advice. The Fools are interesting to read, but I would never trust their advice. To get something close to a pensions, I need an investment vehicle that is controllable. The possibility of big returns are just teasers to sign you up. The dark side (losses) is, of course, never mentioned. Everybody in the business uses this strategy. Thus, buyer beware.

  • Report this Comment On March 21, 2009, at 10:58 AM, ander308 wrote:

    I have been reading these comments for a few years - not just the Motley Fool but also other services. One thing that hold true for all that I have seen is the following two rules:

    Whenever they say "Ten stocks to buy today", you have to pay more money to get the names. (The reason for that is that we can all buy a specific stock.)

    Whenever the say "Ten stocks you should not own today", you click on the teaser and there they are! (The reason for this is that most of us probably do not own those stocks and would not pay anything to get the names. Woe be unto you, however, if you happen to own one of them.)

    Is this just another example of us living in a negative society? Maybe, but more likely it is "advertising in action."

    308

  • Report this Comment On March 21, 2009, at 12:13 PM, jesse2159 wrote:

    Folks, keep in mine, Fool.com was, is and will be a business first and they make money selling advice. It isn't free advice, but more importantly, it isn't very good. I get more insight from the "message board" writers than from the "professional" staff. Perhaps because the message board writers operate in the real world of investing?

  • Report this Comment On March 21, 2009, at 12:43 PM, soycapital wrote:

    From trenton1ryan:"Read up on these and the benefits of MLP's, particular for IRAs."

    I don't believe MLP's are needed in an IRA, please correct me if I am wrong. I own several in taxable account.

  • Report this Comment On March 21, 2009, at 1:20 PM, edbrown100 wrote:

    I can only say "AMEN" to all those comments about MF's having gone the way of other services in constantly coming up with new ideas for additional paid services. I was sucked into two of the recent ones and saw nothing but disaster in my investments in the past few months. I got my original purchase back on one of the services, but waited too long to ask for a refund on MDP.-- and got sucked back into it again when MF announced it was closing it to all comers, but generously let me renew. Now I have to cancel it again. What's with you folks at MF????

  • Report this Comment On March 21, 2009, at 1:22 PM, edbrown100 wrote:

    By the way, MF, how do I go about canceling MDP again? I can't seem to find the original order with instructions for cancellation.

  • Report this Comment On March 21, 2009, at 2:09 PM, alvidovich wrote:

    Some of the readers complaining about TMF might enjoy this website: Stockgumshoe,com or go to

    http://www.stockgumshoe.com/2009/03/lock-in-this-double-digi...

    It is FREE. Al

  • Report this Comment On March 21, 2009, at 2:51 PM, onegoodwolf wrote:

    lihgv - MF is a business selling advice. Take advice with salt and caution. Investing first requires study on your own. Experience costs time, patience and usually money. After 5 to 20 years of focused attention consider if you really qualify to risk your hard earned money. Investing is tough enough in a bull market but even more so in a bear market. Be thoughtful before you hand over to another's advice and act without doing your own homework. Protect your capital is the first law. Do not go into deep water without considering whether or not you can swim.

  • Report this Comment On March 22, 2009, at 8:01 AM, luciaginger wrote:

    We live in Germany and thought maybe only WE thought this service is crap. Thanks to all you Americans speaking exactly what we are thinking. We want to cancel immed. Someone wrote about....how to do it?? No way we will be sucked in for another year.

  • Report this Comment On March 22, 2009, at 4:12 PM, IamScared2 wrote:

    Until our current political leadership changes, financial history that does not include the worst depression and other world calamities is not applicable. The rules have changed; there is a new paradigm. It trends toward a world nation, redistribution of wealth to other nations, etc.

  • Report this Comment On March 22, 2009, at 4:52 PM, IIcx wrote:

    Thanks for the article IIan.

    Here's a list of returns based on a 3/9 open purchase:

    FAS (Financial Bull 3x) +125.90

    MWJ (Mid-Cap Bull 3x) + 47.32

    TNA (Small Cap Bull 3x) + 45.60

    BGU (Large Cap Bull 3x) + 44.45

    I don't recommend buying these ETFs unless you're day-trading -- they are very volatile. But, they are interesting indicators.

    I'm waiting to see how far down this retest takes us before buying.

  • Report this Comment On March 23, 2009, at 10:24 AM, TexasTex wrote:

    My frustration with TMF lately is that they have discovered that there is more money in selling services than there is in market investing. (*i.e. Motley Fool Pro, Duke Street, etc. ) It's like the money making seminar promoters have discovered, there is more money in seminars than there is in the "opportunity".

    I don't fault them for trying to make a buck when the market is not doing it for them, but I am tiring of the barrage of ads and "special" offers nonetheless.

    Fool On!

  • Report this Comment On March 24, 2009, at 2:16 AM, MyDollar2 wrote:

    I thought the old "BAIT & SWITCH" had been called a crime in most if not all states. Like others, I don't like being bombarded with "excessive words BUT little or no substance !!" I'm taking it a step at a time and carefully watching every step !! OTHERS PLEASE DO THE SAME !!!

  • Report this Comment On March 24, 2009, at 10:28 AM, srvstrat wrote:

    After signing up for this service I was optimistic that I would be able to dig up some good info from home. I have recieved a few morsels of info, but I am truthfuly disapointed about the bombardment of e-mail and the fact of them wanting to sell me a new service every day! Hey MF wake up your suscribers just want some simple stock info they can use! If they get what they pay for they might renew,cause I wont be.

  • Report this Comment On April 02, 2009, at 11:35 AM, craigcraig73 wrote:

    I keep asking to be taken off their spam list but to no avail, perhaps this program should be named The Motley Fools!

  • Report this Comment On May 08, 2009, at 6:03 PM, A1foolofthefools wrote:

    I do agree with all the disappointment expressed. I feel I just bought a service that is not delivering. Where's The Meat?

  • Report this Comment On June 10, 2009, at 9:21 PM, obsession1231 wrote:

    I began self-directed investing March, 2009. A broker had cost me $40k in the prior year. (Luckily I had insisted that he transfer most of the money from a junk bond fund to a money mkt account. Otherwise losses would have exceeded $140k).

    I have tried Investor Income and Stock Advisor. In three months, I've profited about $26k with about 100 trades. IMHO, Motley Fool provides good ideas, analysis, and suggestions. The final investing determination comes from my own analysis. Usually I accept 25% --or less--of their suggestions. Like many others, I don't like the teasers but I scan them to gain insight (esp from the comments) and ideas. So far, so good!

  • Report this Comment On June 11, 2009, at 11:50 PM, bf51ef49 wrote:

    I agree with most of you,i've tried about 5 of the

    letters and haven't set the world on fire! Mostly

    been burnt.

    I must add i have had much of the same results

    with "Personal Finance"! The sellers usually make

    more than the buyers, it goes along with --WHO

    CAN YOU TRUST TODAY?

  • Report this Comment On June 12, 2009, at 1:36 AM, Gabe102 wrote:

    I'm an old man who has been around to long and have tried a couple of MF subscriptions, Mostly just good reading and teasers.

    We are in a depression and this rally is dangerous, in times like this I play small caps for the day only. Most of my money is in money market funds until I know the market has settled down and has a sense of a stable direction.

    After watching the market for 40 years I know better than to trust any long term investment in such a weak market, The Fed is just as lost as you and I at the moment, all of the bonds and treasuries are out of their control and getting worse by the day. They are like so many of your neighbors, deep in dept and just trying to keep their heads above water. Honestly, just read up on bonds and Tbills a little and you will get the drift. You can't make a lot of money everyday or year in the market, when the market is in turmoil you never know what it is going to do from day to day. Stay on the sidelines and don't get greedy, it is hard but you will have some money to invest in the next bull market.

    Don't chase lost money! No one cares about you making money but you --it is and always will be a dog eat dog world--only you can take care of your money---be slow and methodical or you will be poor.

    Just read, listen and learn from others. Retest should ring a bell in your head. You can lose money in a bull market!!!!!!!!!!!!!!

  • Report this Comment On July 05, 2009, at 12:13 PM, WishToRetire2 wrote:

    thanks Gabe. Your comments resonate with me the most of all the above.

  • Report this Comment On July 06, 2011, at 1:22 PM, sept2749 wrote:

    Guys, I usually like TMF articles but this one is simply a come - on to buy another subscription. I know TMF is a buiness - so advertise! Please don't use these tactics. When I see a title, like the one here, I get excited at the prospect of getting some good info. However, telling me that small caps stocks can make you more money then large caps stocks is a wonderful thing - umm.. if the small cap ever goes up! By the way exactly what are the best stocks to buy i this market?

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