©1996, ProMotion, inc.
www@bookpage.com
America's funniest home investment advisers today are inarguably David and Tom Gardner. They are the geniuses who launched The Motley Fool investment newsletter in 1993, The Motley Fool on America Online in August 1994, and now have a new book, The Motley Fool Investment Guide: How The Fool Beats Wall Street's Wise Men and How You Can Too.
Anybody fond of common stock investing, especially without professional advisers or mutual funds, can enjoy the Gardners and what they have created-perhaps even profit from it. Their "Fool Portfolio," using real money, consistently beats the S&P 500 with a combination of Dow theory, small-cap investing using the "Fool Ratio," and short selling.
More important than their investing success (40 points ahead of the market after the first year) is the vitality of the online service's busy and informative message boards, featuring gossip mixed in with research, practical valuation, and analysis.
Electronic publishing became the Gardners' ticket to fame and popularity. Their service is currently housed on America Online, a stock, by the way, that's a mainstay of the "Fool Portfolio."
This book could start your calendar year out right. Hard not to love the "Foolish Dow Portfolio," which "takes no more than fifteen minutes a year, demands no research materials other than one copy of The Wall Street Journal, is low in commissions, assumes minimal risk, on average triples per year the returns of your average mutual fund, and demands no more than a telephone or modem relationship with a deep-discount broker."
The Gardners are pithy every step of the way, as in "we start by recognizing that broad diversity really does nothing but reward the seller of the investment products." And "If you have to read something more than twice to figure it out-lose it! It's not worth the trouble."
Their challenge to the reader is to beat the "Dow Dividend" approach, a refinement of Michael O'Higgins's "Beating the Dow" which allegedly returns 25 percent annualized with very little portfolio maintenance. Keep 20 to 30 percent of your overall holdings in Dow stocks, write the Gardners, then invest 50 to 60 percent in smaller-cap growth stocks. Up to 20 percent at any point in time could be allocated to shorted stocks.
Here are the authors' recommended investment tools for Fools: the S&P Stock Guide, Zacks Analyst Watch, and their own Motley Fool Online. Here's what the authors say about financial newspapers, magazines and TV programs: "They offer opinions without having the capacity or the accountability to hear back from their often more sophisticated audience, and they do all this at rather great expense. Being Foolish means being digital."
Translate: go online with the Motley Fool. But even if you don't choose to do that, heed Ben Graham, Warren Buffett, Peter Lynch, Michael O'Higgins, and the Gardners: invest with your eyes open and reap the rewards.
©1996, ProMotion, inc.