Post of the Day
July 13, 1999
Rule Breaker Port Folder
Posts selected for this feature rarely stand alone. They are usually a part of an ongoing thread, and are out of context when presented here. The material should be read in that light.
Subject: Poll Results!
A recent controversy on the Motley Fool Rule Breaker Portfolio board centers around the Fool's picking, portfolioing, and promotion of various stocks. A series of posts has developed, which if I may summarize, say a) "people are nitwits and blindly follow the Fool's picks", or b) "no they don't." OK, the debate is probably over 100 posts long, so perhaps I've left out some of the finer points of the argument.
ThePapii posted a message which said "Here is a fact - Go to every bulletin board where the Rule Breaker owns stock - AMZN, AOL, SBUX, etc. Ask the posters this question: Did the Fool buying this stock have any influence on your purchase decision?".
I picked up on that and made a request for "votes" to see if ThePapii's assertion is true. The message asking for contributions was posted on all 13 boards which comprise the stocks in the Rule Breaker Portfolio. Here is a sample ballot, in case you haven't seen it:
Over 100 people sent e-mails to Goofyhoofy's Trusted Research Company, soon to be LLC. Because many had more than one stock in the portfolio, that translated to a total of 196 votes. Disclaimer: Some of the boards (such as Iomega) are very active, with over 20,000 posts. Goodyear Tire, on the other hand has about 100. Total. Ever. So the results are likely skewed by the difference in the kind of people who buy certain categories of stocks. Sub-Disclaimer: if there are kinds of people who buy certain categories of stocks.
In this post you'll note I've noted some other important disclaimers because good form dictates that I do so. And in the post which follows this one I have quoted some of the comments (most of them, actually) which people included in their "votes." (I got permission to do so from those with significant thoughts. If it just said:" ATHM: Yes" I didn't bother to ask. Sue me.)
For that reason I give you the total as well as the breakdown by individual stock. Note that in these subset data segments you are looking at very small numbers, in most cases so small as to make them meaningless. Of course this whole exercise is meaningless, really, an unscientific poll and all, but follow along, won't you?
I took Papii at his word. "Any influence", he said. If there was the slightest scintilla of influence mentioned, it went in the "yes" category. Most people, of course, simply gave a "yes" or "no" answer, in which case the interpretation was entirely theirs.
(Go on, you can scroll down if you want. I'm supposed to do this.)
* Who knows who the hell responded to this?
* I may have just made everything up.
* People who eagerly respond to surveys are quite likely different from you and me, who tell most approaching strangers to take a hike. Or take one ourselves.
* My math is not so good, especially since I do everything in Roman Numerals, and I have a very hard time dividing by "L".
* Inviting people to respond is the worst possible kind of surveying. But to get an equivalent number of responses from a stratified sample would have meant sending out 4,000 e-mails and spending around 10-grand for a weighted population base, and I'm a little short this week.
* Surveys are inherently interesting. They are not necessarily informative.
* There may be a big margin of error here. I'll print it in the big margin, over there --->
Hope I don't make an error.
* Your humble pollster came to the party with a bias against the proposition. I have four of the stocks in the Rule Breaker Portfolio: AOL, ATHM, CHV, SBUX. Three of the four were purchased without regard to the Fool in any way shape or form. ATHM is the fourth, and the Fool (though not the RB Portfolio) helped me focus on the stock which I was aware of but had not thought about seriously. However I have also considered other stocks in the RB Port without buying them (such as DD and EBAY), and do not consider the Fool's purchase to be a significant motivator in my own behavior. That said, I put it down as a "yes", because of ThePapii's precisely worded "any influence" parameter. So for Goofyhoofy that's three "no" and one "yes", albeit a weak one.
I thought, "Is ThePapii crazy? People are not that stupid. Well, I'm not anyway." Heyaw, heyaw, heyaw.
* I do not work for the Fool. Actually, I don't really work for the place I work for, but they pay me, so let's just say I'm employed elsewhere. I have no axe to grind. And I would hire someone to grind it if I did.
* OK, can't stall any longer.
196 votes were tallied. Of those, 95 said the Motley Fool had "any", "some", or "a lot" of influence. I didn't ask people to rank "how much" influence because it would have complicated the instructions and most people are nitwits and wouldn't have followed them anyway.
Speaking of which, 6 people sent in responses like "Nope" without mentioning which stock they were talking about, so that sort of proves my point.
By individual stock:
Stock . / . Yes . / . No . / . Total . / . Posts on board AMGN 6 yes . / . 9 no . / . 15 total . / . 600 posts AMZN 11 yes . / . 11 no . / . 22 total . / . 24000 AOL 14 yes . / . 20 no . / . 34 total . / . 16000 ATHM 18 yes . / . 9 no . / . 27 total . / . 14000 CAT 7 yes . / . 8 no . / . 15 total . / . 1000 CHV 1 yes . / . 5 no . / . 6 total . / . 200 DD 2 yes . / . 8 no . / . 10 total . / . 450 DJT 1 yes . / . 1 no . / . 2 total . / . 750 EBAY 7 yes . / . 5 no . / . 12 total . / . 3600 GT 1 yes . / . 5 no . / . 6 total . / . 100 IOM 9 yes . / . 2 no . / . 11 total . / . 23500 SBUX 9 yes . / . 7 no . / . 16 total . / . 3500 TDFX 8 yes . / . 6 no . / . 14 total . / . 19000 unknown 1 yes . / . 5 no . / . 6 total TOTAL: 95 yes . / . 101 no . / . 196 total
This is always my favorite part of surveys, because it's where some idiot takes the data and tries to prove something that you know is not true. I'll do my best.
* The people on the Iomega board (in all cases when I make a sweeping generalization such as this, I mean the people who responded from the Iomega board*) are not happy. You needed me to tell you this, right? Wait, I'm just warming up. Almost all of them bought because the Fool bought. Perhaps they're still holding because the Fool is still holding. Dunno.
. . .* Sidenote: I hate sweeping generalizations anyway. They are always wrong. ;)
* The greatest single response came from AOL stockholders, who are less likely than the median to follow the Fool's advice. So much for the "simpleton" theory. About AOL, I mean. Anyway I have to say that, I own some.
* Another strong response came from ATHM owners, who were significantly more likely to have discovered, been influenced, or bought because the Fool did. You may draw your own conclusions. Careful, I own some of this too.
* CAT owners are rightfully proud of their purchases, and seem to delight more than any others in their purchase. Many of the individual comments (see following post) attest to their feeling of a "special" status.
* AMGN owners are dismissive of the "I follow the Fool" theory, and rate significantly below the median in "Fool Influence. (FI)"
* Goodyear Tire owners don't like to post, apparently, (100 total) but they seem to vote just fine. I'm surprised they're not headquartered in Chicago. 6 votes, nearly as many as they've had posts in a month. At that same 6% rate, we should have gotten nearly 1,500 votes from Amazon holders. Thank god it didn't happen!
* Nobody likes Trump. Long, short, or middle. Goldilocks couldn't make this one work.
* I thought TDFX was going to pull an upset. The first five in a row were "no way, baby." Then then next five were "way, baby". Ah well.
* Many people mentioned that they were not influenced by the Rule Breaker "selection" but may have been swayed by a particular stock's inclusion in the FF. Since I was being so slavish to Papii's "any influence" I thought about being just as slavish about his "Rule Breaker Portfolio" and ignoring these FF picks, but at the end of the day I counted them as "yes" votes also. No sense being a jerk about it. Good advice generally, methinks. (See the comments in the "next" post for more details.)
* When grouping "old economy" (CAT, CHV, DD, GT) against "new economy" (AMGN, AMZN, AOL, ATHM, EBAY, IOM, SBUX, TDFX, i.e.all the others except Trump, because after all, nobody cares about that one at all) we find that most of the "new economy" companies have an "A" in their stock symbols. Or at least an "X". Sure can't say that about Chevron! Not sure how CAT squeezed in there, tho. And clearly IOM doesn't belong, but who hasn't figured that out yet? I'm also sure there's something meaningful in the numbers, too, but damned if I can find it.
The following chart shows the percentage of shareholders of a particular stock who say there were influenced in any way by the Fool. (Arranged in ascending order.)
Fool Influence (FI) Chart
GT 16% CHV 16% DD 20% AMGN 40% AOL 41% CAT 46% AMZN 50% DJT 50% SBUX 56% TDFX 57% EBAY 58% ATHM 66% IOM 82%
* Amazon is the median, with half the stocks above in "Fool Influence" (FI) and half below.
* Well, "old economy" stockholders are all below the FI median. Maybe there are some numbers in there somewhere. I should get out the ole' slide rule, after all.
* If I was strongly against paying for this survey information, I would be a fee (FI) foe. I've sat here for an hour trying to get "FUM" into that sentence, but it just won't come.
Which is just as well, because it's over. Check the comments on the next post. Good stuff. Oh, yeah,
But there is this. The premise (remember that? back there fifteen-hundred words or so?) was not exactly as I portrayed it in the "call for votes." Note the part I've now included which I left off the questionnaire so as not to influence the vote:
"Here is a fact - Go to every bulletin board where the Rule Breaker owns stock - AMZN, AOL, SBUX, etc. Ask the posters this question: Did the Fool buying this stock have any influence on your purchase decision? I think you'll get a resounding "Yes". Especially on the AMZN board where so many are unfortunately losing their shirts."
Roughly half say there was "any influence". Half say none. The AMZN board is the median. The vast majority of those who say there was "influence" are careful to say "but I do my own research". That is to be expected, of course, but that does not make it any less true.
Case not proven.
Your humble servant,