Motley Fool

Infobox Dotcom company
company_name = Motley Fool
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company_type = Financial advisory services
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foundation = July 1993
founder = David and Tom Gardner
location_city = Alexandria, Virginia
location_country = United States
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area_served = US & UK
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company_slogan = To Educate, Amuse & Enrich (US)
Seriously good with money (UK)
url = http://www.fool.com
http://www.fool.co.uk


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The Motley Fool is a commercial website about stocks, investing, and personal finance. The Alexandria, Virginia-based private company was founded in July 1993 by co-chairmen and brothers David and Tom Gardner, and Erik Rydholm, who has since left. The company employs approximately 200 people.

History

In August 1994, the Gardner brothers parlayed their 1-year-old investment newsletter into a content partnership with America Online. The Motley Fool gained renown for its early recommendations of stocks, such as that of America Online (AOL) and Amazon.com, and was featured in a cover story for "Fortune" magazine (1996) about the emergence of online interactive discussion as a new form of investment research.

In early 1997, the "Fools", as the site's enthusiasts refer to themselves, migrated their home page off AOL and onto the fool.com website and established a site in the UK fool.co.uk.

Motley Fool content is available to the public by its podcast and nationally syndicated newspaper column, and it formerly had a radio show on National Public Radio. [ [http://www.npr.org/templates/rundowns/rundown.php?prgId=15 The Motley Fool for March 31-April 6, 2006] ] The Gardners have written several best-selling books on investing, mostly penned between 1996 and 2002. The best-known of these is "The Motley Fool Investment Guide", which in 2003 was called the "#1 All-Time Classic" by investment club members of the NAIC. [ [http://legacy.betterinvesting.org/articles/web/4237 Favorite Books Of NAIC Members] ] The Gardners are famous for their view that, for the majority of people who have little time to keep track of stocks, the best investment strategy is to "Buy an index fund."

When the plentiful financing dried up and the Dot-com bubble collapsed in 2001, the company, in common with its peers, ran into trouble, resulting in one third of the staff being made redundant and the closure of its nascent operations in Germany and Japan. [ [http://pqasb.pqarchiver.com/washingtonpost/access/68273644.html?dids=68273644:68273644&FMT=ABS&FMTS=ABS:FT&fmac=&date=Feb+9%2C+2001&author=Neil+Irwin&desc=Motley+Fool+Lays+Off+a+Third+of+Its+Staff+in+Reorganization Motley Fool Lays Off a Third of Its Staff in Reorganization] ]

Current status

Following the 2000–2002 downturn of the stock market and the Internet, The Motley Fool started to offer more services, such as a range of investment styles from value-based small cap stock investing to growth and technology stocks to dividend investing.

Today, the company earns money primarily through subscriptions to its investment advisory services. The services, which combine a traditional paper newsletter with interactive electronic discussion boards and other tools, cover a range of styles from mutual funds to small caps to international stocks. The company also provides additional services outside its primary stock-picking focus. Although no longer the primary business model, advertising continues on its Web site, which is visited by millions. A December 2005 "Washington Post" article detailed the Motley Fool's 10-year lease for new offices in Old Town Alexandria, Virginia, taking over office space vacated by Time-Life. [ [http://pqasb.pqarchiver.com/washingtonpost/access/941726301.html?dids=941726301:941726301&FMT=ABS&FMTS=ABS:FT&fmac=&date=Dec+15%2C+2005&author=Lila+de+Tantillo&desc=The+Motley+Fool+Finds+Room+to+Grow+in+City The Motley Fool Finds Room to Grow in City] ]

In September 2006, the company unveiled its newest beta offering - Motley Fool CAPS - a service which monitors and ranks the most successful stock pickers amongst its members.

The Motley Fool Stock Advisor

In April 2002, the company launched the first of its premium subscription services. David and Tom Gardner pick one stock each month in a brotherly competition to best each other and the S&P 500. According to Mark Hulbert of "The Hulbert Financial Digest", for the past five years the brothers have earned an average return of 22%, annualized, versus a comparable return of 7% for the Wilshire 5000. [ [http://www.marketwatch.com/news/story/grande-expectations-starbucks/story.aspx?guid=%7B8AC80762-709D-40A1-A4F4-0D06FA50474E%7D Grande expectations for Starbucks? - MarketWatch ] ] As of November 2007, the brothers had picked a combined total of 134 stocks, 34 of which had doubled or better. They maintain a consistent buy-and-hold style, tending to let their winning stocks compound returns over longer periods of time. Their three best selections have been Quality Systems, GameStop, and Marvel Entertainment, all of which have at least sextupled. Their worst selections have been Krispy Kreme Doughnuts, Shuffle Master, and Meritage Homes, all of which were at least cut in half.

Community discussion boards

The Motley Fool hosts on-line discussion boards for the purpose of helping people make better financial decisions. Registered users can get access to all non-newsletter boards that cover a variety of stock, personal finance, and investing concepts. The discussion boards are used heavily to recruit future Motley Fool staffers, with frequent posters first awarded free subscriptions to their favorite newsletters, to eventually receiving a small stipend and "TMF" username moniker to patrol the boards.

The Motley Fool versus Wall Street

The Motley Fool and the financial services industry have traded criticisms over the years. Fundamental disagreement between them centers on the company's belief that average people are qualified to guide their own financial lives. The Motley Fool promotes managing one's own money, its own free and paid-subscription newsletters to provide information to the individual investor, avoiding the conflicts of interest that can plague financial advisory relationships. Wall Street firms, on the other hand, have traditionally contended that financial management is the work of professionals and requires a commensurate level of skill.

The Foolish Four

In 2000, the Motley Fool ran into controversy with its eventually discredited Foolish Four investment theory. [ [http://www.investorhome.com/dogs.htm "Dogs of the Dow" and the "Foolish Four"] ] The theory had been constituted squarely on the shoulders of the Dogs of the Dow analysis popular at the time. In the same year, Motley Fool writer Ann Coleman stated that the Foolish Four method "turned out to be not nearly as wonderful a strategy as we thought." [ [http://www.fool.com/ddow/2000/ddow001229.htm Fool Four Moves On] ]

References

External links

* [http://www.fool.com/ The Motley Fool]
* [http://www.fool.co.uk/ The Motley Fool UK]
* [http://caps.fool.com/ Motley Fool CAPS]