<THE DRIP PORTFOLIO>
Are You Foolish?
by Jeff Fischer (TMFJeff)
ALEXANDRIA, VA (May 24, 1999) -- Don't let the proliferation of advertisements and promotional banners on this site fool you: this is still the Motley Fool and we're just individual investors, like you.
The Motley Fool began online in 1994 as a hard-edged, sometimes moody, always opinionated site that brought to light many of the wrongs in the investment industry -- many of which unfortunately continue today.
The goal of the Fool since the beginning has been to teach investors how to avoid common financial pitfalls and invest independently to build long-term wealth. Not all Fool ideas have been foolproof and not every idea has been a success. Some ideas have been downright disasters, in fact, but those ideas have perhaps been the most valuable from a learning perspective. Overall, the Fool's mission is to educate. The Fool banner says "Educate, Amuse, and Enrich." Educate comes first, and you can only be enriched through education, so those two goals are somewhat redundant.
There are many ways that the Fool strives to educate. Consider the Hall of Portfolios, which holds the Rule Breaker, Rule Maker, Boring, Drip, Foolish Four and Harry Jones portfolios.
In the Hall of Portfolios, the Fool was the first to post real-money stock portfolios online, to announce all trades before making them, and to include all commissions in portfolio returns. Each portfolio is also accountable in that daily and historical returns are shown from inception and a regular column -- written by portfolio managers -- accompanies the portfolio's numbers, namely with the goal of educating.
The Fool remains alone in announcing trades before making them and in offering real-money products (which is what the portfolios really are -- educational products). Too many of the Wise first build positions in a stock or add a stock to a mock portfolio and only then announce the buy. Hence, they benefit from their own announcement. Their portfolios benefit, too.
(Not enough, however. Last year the Rule Breaker, up 199%, was the best-performing portfolio of hundreds of newsletter portfolios -- most of which are mock portfolios -- tracked by a large tracking newsletter.)
Despite the fact that the Rule Breaker is often harmed by its own trade pre-announcements (because the market does often move by them), it will probably never change its trade announcement policy. Why not? Because the Fool is about accountability and education more than returns. Beating the market is a goal, but only if accomplished via an educational process shared with all.
Why is education so important? For many reasons, but one of them is that we don't want you to simply mirror us. We hope that we offer a strong enough service that you learn to invest on your own. Mirroring us will always prove to be a mistake. Even if you make millions of dollars in the next 30 years doing so, you can't pass any knowledge on to your offspring. You can only say to your grandchildren with a shrug, "I just followed the Fool. Go to Fool.com to invest the money like they do."
As much as the business side of the Fool might love such an endorsement, it's nothing to hand down to your ancestors. Nor is a pile of money worth handing down without handing down an education -- about life, investing, values -- with it.
There are individual Foolish investors behind this site. We're individuals who invest our own money and, in my case, practically ignore the daily stock market. I look at the news for these columns, but -- as you can surmise -- not much of the news is important enough to cover. Instead, it's a waste of time. We look for long-term truths. You should, too. We want to help you, but don't lean too hard on us for decisions.
I write this because I continue to receive e-mail each month asking where our next dollars are going -- e-mail from people anxious to do the same. And I write this because when the Rule Breaker Portfolio announces a buy or sell, the stocks often move up or down the next day because people mirror it.
Invest your own money, in your own way, however you feel comfortable. Use our portfolios as examples from which to learn. We offer plenty of lessons, both good and bad. Use our stocks as ideas. Investigate them. Maybe you will buy some of our stocks after you learn about them -- but don't buy them blind.
Things get fancy. Websites. Newsletters. Radio ads. Things become professionalized and slick in order to be convincing. Don't let the maturing of the Fool and its occasional business-look brainwash you into thinking that it is a source of stock tips. It isn't that at all. It is a source for information, personal finance, and general investment advice, but not "buy this," "sell that" stock tips. That is the furthest from our mission. The Fool's mission is to empower everyone to make their own decisions. If you're not making your own decisions yet, you're not Foolish yet. You can get there.
Fools Wanted: Apply Within.