Post of the Day
May 13, 1998

From our
Cash-King Board


Subject: Forbes Article
Author: sportsfool

After reading last night's Cash-King report, I looked up Mark Hulbert's February article in Forbes to see what the deal was. I had to e-mail a response. Here it is.. and sorry if it is old news and goes a little long.

Belated response to Mark Hulbert's February Fool Skewl


"I know I'll catch lots of flack for my skepticism about these heroes of the Internet age, but numbers are numbers and facts are facts."

Yes, facts are facts.. and numbers are numbers. Unfortunately, both seem to have called in sick in your February column regarding the Motley Fools. You deserve nothing but flack.

"Three of the four real-money Motley Fool portfolios of which I'm aware have lagged the stock market."

"Of which I'm aware." ???? Which ones? And what are the numbers? Are we to believe your argument about MF when you haven't even done enough research to be "aware" of all the portfolios? Don't get me wrong. I'm all for hearing contrary views of the Motley Fools. I believe it's healthy to question "authority", even though the Fools would be uncomfortable with that moniker. But given the "guts", or rather, the lack of them in your article, I can only assume you are perhaps a wee bit jealous of their popularity?
The Gardners preach doing your own research, your own thinking and making your own decisions. They hail index funds as good investments for people who don't have the time or inclination to research companies and are forthcoming about their successes and failures.  
For the record.. I have read most of The Motley Fools books and frequent their web site and in allof their writings they

STRONGLY ADVISE READERS NOT TO SIMPLY COPY THEIR PORTFOLIOS.

The Gardners preach doing your own research, your own thinking and making your own decisions. They hail index funds as good investments for people who don't have the time or inclination to research companies and are forthcoming about their successes and failures. Yes, they admit they are constantly learning, re-evaluating their positions and keeping open minds to new ideas and approaches just as all of us are. That is apparantly what YOU and THE WALL STREET WISE still don't get.

After reading the "further information" you suggest, I got the sense that investorhome.com was more interested in skewing the Fools rather than objectively reporting on them. They talk about several real money funds that are underperforming the market for two or three years now, and in the same breath, declare the success of the Fool Portfolio as "just dumb luck" because it hasn't been around very long and two of the stocks (AOL AND IOMEGA) happened to take off like a rocket. You can't have it both ways, Mark.

The Cash King portfolio was criticised, ACTUALLY CRITICISED!, for having a large position in cash while the market was racing ahead by 6 percent. HELLO??? ANYBODY HOME?? The whole point of that portfolio is to invest in strong companies for THE LONG TERM, and not get caught up in current numbers (and P/E's for that matter).Yes, the Borfolio is underperforming the market, but these are for the most part quiet, unhyped companies that are poised for LONG TERM market performance. And sure, the Fools are excited about the early success of the Fool Portfolio, but they would be and are the first to admit that the game is still in the "bottom of the first."

So while you, Mark, and the Wall Street Wise sneer and look down your noses at the Motley Fools as "just some cocky kids riding the final wave of the great Bull Market", I choose to continue to LEARN with them and profit from their honesty, sincerity and sense of humor.

Oh, and uh.. See you in 30 years..(the bottom of the 9th)

P.S. You might want to check out this article at
www.fool.com/CashKing/1998/CashKingPort980512.htm


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