The MotleyFool.com site is run by investors and promotes itself as being THE source of information for the individual investor. I used to read the articles religiously. But after a year or two, I started to notice that the articles were all the same with one stock symbol swapped out for another.
The analysis seemed good, but there was never any definitive answer to anything. They also used to have writers go head-to-head about why something was worth buying and why that same thing wasn't worth buying. Some might argue that the writers are just trying to present a balanced view with the intention of allowing the reader to make their own decision. A more cynical sort might think the readers were floundering just like most other amateur investors. Sure they made a good pick here and there, but they didn't have anything more going for them than any other newsletter.
I even tried out two of their fee-based services. I had particularly high hopes for the Hidden Gems service. The purpose of this program was to identify small, up and coming companies that had the potential to double in three years. At first, the service made some phenomenal picks. Those picks happened to coincide with the period in which small caps were outperforming other areas of the stock market. And sure enough, subsequent stock picks didn't do as well.
But what really bothered me was that the creators of the Hidden Gems service somehow thought it made sense to compare the returns of the S&P 500 to the Hidden Gems returns. This makes no sense! The gems were, by definition, small cap stocks. How is it appropriate to compare returns of small cap stocks to a large cap index? Especially when there's a much more appropriate small cap index, the S&P 600.
So eventually my subscription ended and I felt no need to renew it.
Entries (RSS)
i have had mixed results. A couple were good picks, but a more have been bad then good, can't really say it has been worth it.
i rescind last night's comment. i have been burned, royally in the past by poor advice and broker acting like "i know" which cost me a lot. i just have a low tolerance factor for advice. motley seems to be more concerned with the average ignorant/inexperienced investor like myself. a retirement fund just informed me that they want to play in derivatives and commodities and who knows what else. what is the matter with everyone? they want to gamble with my retirement and deal in the things that are messing up the economy and driving up everyday items into the stratosphere.
almost seems that the hidden gems "guru'' bastards are a pump and dump type operation. typical bull shit guru that sell expensive advice then leave you.
Hi Ken,
Have you compared your returns to the S&P 600 index? There's an ETF that tracks it with the symbol of IJR. Part of my issue with HG is that the picks aren't compared to an index that is representative of their market capitalization. I'd be particularly interested to know how HG is doing in the current market that favors large companies.
I've been an HG subscriber for a couple years now and have had mixed results. I think my HG picks have marginally outperformed the S&P500. I definitely have my complaints with HG. HG seems to work best for:
1) people who are lucky, or
2) people who are already fairly good at investing, or,
3) people who have the time and money to invest in every pick.
The reason I write this is because many of the HG picks suffer significant loss and if a subscriber chooses a disproportionate number of these, the results won't look much like the advertised returns of the scorecard.
Ken,
I couldn't agree with you more. Some MF members with paid premium memberships thinks this info is bullet-proof. Nothing could be further from the truth. I'm a MF Stock Advisor member and will be renewing my membership. I've found my own Hidden Gems by researching the competitors of their rec's. All this internet info is subject to further investigation. And when I'm satisfied... I BUY!
BTW MF's transparent scorecard clearly shows the good and major miscues they made. I feel my membership fees have been money well spent.