In this previously published Workshop column, Todd Beaird provides a "road map" to some of the many Workshop resources available. (Originally published Dec. 9, 1999.)
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A newcomer to the Workshop might be overwhelmed by the amount of information here. There are numerous screens, many brilliant posters contributing new ideas daily, and TWO boards devoted to this style of investing. How can the average person hope to get up to speed?
This article is intended to be a sort of "road map" to Workshop resources. Hopefully this will streamline the learning process for aspiring Workshop Fools.
Before you start learning about the Foolish Workshop, answer a few questions? Why have you come here? Have you heard about 30% annual returns over the past decade, and hope to take advantage of that to get out of debt? If so, then STOP! Do not pass Go, and do not invest in a mechanical strategy.
Instead, go back to the 13 Steps to Invest Foolishly and start at Step One. Also, work on your budget and savings before jumping into stock investing. Some other places in Fooldom to look for advice are the Living Below Your Means, Credit Card, and Retirement Investing boards.
Once you have your finances in order, you might ask, "How much of my portfolio should I allocate to stocks?" The general rule is to only put funds into the market that you won't touch for at least three to five years. We don't focus on that aspect of portfolio allocation here, but we have done a few articles recently, one discussing a "three bucket" approach, and a follow-up about modifying that general approach to fit your needs.
Enough of the preliminaries, now for the fun stuff. The first bit of advice is always "Read the FAQ." TMFElan has put an awful lot of time and effort into putting together an FAQ for the Foolish Workshop board. It's an excellent resource for all visitors. Print it out and consult it often.
In addition, LAPropDoc has written an unoffical guide for new investors, which I highly recommend to anyone new to the board. It's funny, well-written, and covers a lot of ground without being overwhelming. Part I gives an overview of what MI is, and Part II touches on issues such as holding periods, taxes, and volatility.
The next resource is where you are right now! Since late May, we've been running articles covering topics such as an introduction to mechanical investing, discussions of the various strategies, selecting a strategy that's right for you, and strategy returns. We've also discussed costs, tax effects, and even some of the mathematical issues of this mechanical approach. Many of these articles are referenced in Elan's FAQ, or you can click on the link at the right and go to the Reports Archives. You can also click the Screen Explanations to the right for descriptions of and historical returns for many screens.
We try and cover as much as we can here, but often our articles are merely distillations of topics covered on the message boards. As mentioned above, we have two message boards. The Foolish Workshop board is the area for questions and comments. Think of it as the place to learn. There is also a Mechanical Investing board, where the serious R&D goes on. That board can be intimidating, with over 48,000 posts and a lot of technical jargon, but it's a great resource for those who've mastered the basics. The MI board also has an FAQ, which has links to a number of outside websites developed by board participants to facilitate developing and testing new stock screens.
If you don't have the time to read 50,000 posts, then you should check out Mindseye's compilations. His recent post lists all of his "Backposts," which list prior posts and articles on a variety of different topics from some of the finest minds in Fooldom. You can also check out those backposts at FoolishlyFree's website.
Until next time, Fool On!
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