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The Motley Fool Investment Guide : How The Fool Beats Wall Streets Wise Men And How You Can Too

The Motley Fool Investment Guide : How The Fool Beats Wall Streets Wise Men And How You Can Too

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Product Info Reviews

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Rating: 2 stars
Summary: Pompous and uneven
Review:

This is a poor introductory guide to some forms of investment, specifically stocks. There is very little coverage of any other forms of investment, and what coverage there is, is biased strongly against anything other than stocks on the Dow or small-cap growth stocks fitting their criteria. Calling this book an "investment guide" is pretty misleading.

The book is written in a know-it-all style that you will no doubt either love (apparently a lot of other reviewers) or hate (me). The pages are full of their cheesy and repetitive medieval references concerning "fools" and "wise" men. And if those don't grate on you the unending plugs for their online services will.

The basic premise of the book is basically as follows: investing in mutual funds is stupid because you are virtually guaranteed an average 25.5% return by picking 4 stocks on the Dow Jones using a formula. Now, this is obviously absurd. Yes, the system worked over the past, but it isn't working currently (check fool.com under portfolios to see how they're doing this year -- DOWN 1.84% as I write this) and there's no proof it will work in the future. Also, the hypocrisy is overwhelming as they continually dis those who claim to have systems and also those who use technical analysis to make stock picks.

There are a couple of strong points to the book: the five chapters on small-cap growth stocks and how to evaluate them are very well done. They show you how to analyze a company's balance statement, and what sort of general financial indicators to look for when picking small-caps. Oh, and the Joey Roman penny-stock parody in appendix C is extremely funny.

I can't honestly recommend this book at all. There are many other books that explain the same material, and with a more even approach. This whole book oddly reeks of a get-rich-quick mentality, while they shoot down everyone else's get-rich-quick schemes. The poor advice combined with a hokey writing style make this book a pretty painful read.

Rating: 3 stars
Summary: Decent Investing Primer, but not much more
Review: Dave and Tom have created an immensely readable and informative book for the average Joe who wants to learn how to invest in the stock market. Their liberal use of humorous examples makes the book hard to put down. They explain why mutual funds are usually a bad choice, how to do your own research, how to avoid sky-high commissions, how to do your own research on companies, the difference between fundamental analysis and technical analysis (and which one is basically worthless), and even how to make money in a bear market (yes, it can be done, and it's a lot easier than you might think). Overall, if you are looking for a simple and fun explanation of how to get started in investing, you can't possibly go wrong with this one.

Rating: 4 stars
Summary: Very good intermediate book
Review: I did not think i was going to like this book untill i was half way through it, but it is overall a good book. You must be cautioned though that this is not a novice book. It is probably the third or fourth book that you should read. ( see my other reviews for recommendations). I like their methods for picking stocks and have used them successfully myself. They also get you thinking. For example, why pay a broker who is only returning 11% per year if the S&P 500 is at 15%. I agree with the book you would be better off investing in an index fund. I also like their sense of humor. You will have to read the book to see what i mean.
On the the oportunities side, I do not feel believe this is good reading for anyone who has no investment experience or, has not read any other novice level books. I also disagree with them on futures. While I do agree that they are very risky i think and experinced investor should try a small futures contract at least once in their investment carrear. Just remmeber the rule " dont gamble with what you are afraid, or cant afford to lose", if you are then by all means do not get into futures. I also think when writing the book they should have found a way to keep the readers interest from the start of the book. The 17 people in my investment club have all read this book, and agree. The book doesnt get interesting until half way through.

Rating: 4 stars
Summary: Good...with a capital G
Review: I was rather surprised by this presentation's listener friendliness. Being, as I am, one who is new to investing, I find that the stock market can be rather threatening. What does all this mumbo jumbo mean, I often ask myself. The Motley Fool Investment Guide: How the Fool Beats Wall Street's Wise Men and How You Can Too does a terrific job breaking down what is necessary and what is not. Additionally, it does so in a manner that keeps your attention and is easy to relate to.
The manner in which methods and definitions are broken down into several points is very helpful. "Foolish" (capital F is good) checklists provide great ease in deciphering what stocks are right to invest in. They offer explanations of the importance of such characteristics as PE ratios, incoming cash verses outgoing debt, ability to grow immensely, and important signs of properly run management. Also, such subjects as shorting stocks and index funds are summarily explained. These explanations offer common knowledge to those feeling in the dark. The tips provided are level-headed and logical to follow. While for many people this program will not offer many novel ideas, it will provide a starting checklist when choosing what stocks to consider.
Perhaps the most beneficial part of the Motley Fool's message is that the worst risk one can take, is not taking a risk. It is very easy to become weak stomached in the market we currently have. Sudden drops can make one want to sell it all. Most investing, however, should be with the intent of long term return. Thus while it seems risky to allow a stock to fall, the greater, foolish (lower case bad) risk is taking it out.
Overall, this is a very good learning tool for one wanting the stock market to be demystified. It is a perfect starting tool for one wanting to get in on the action. A warning, however, is not to take this, and any, information as the word of God. Use this program to compare to other investment schemes to find what is best for you.

Rating: 5 stars
Summary: The Best of the Bunch
Review: Out of the three audio books on CD I have listened to, this one is by far the best! It pulls a bit of info from each of the other 2 books and then adds "investment guide" touches. If you are on the fence about purchasing a book from these guys I reccommend you purchase this one only and save yourself the extra $$$. (I purchased the set of all 3 audio books in a 3-pack)

Rating: 3 stars
Summary: Decent Investing Primer, but not much more
Review: The Motley Fool Investment guide by the Gardners was a fairly interesting primer on the subject of investing, with a particular emphasis on stockpicking. However, that is ALL you should take it as. It should merely be viewed as ONE type of overview of the stock market that may or may not be valid under current market conditions.

Note: Beginning investors should be very wary of following the strategies outlined in this or ANY investing book with any significant sum of money. Run a simulation portfolio and test out the validity of these methods before you plunk your hard earned cash into some particular system. Be warned. My opinions may sound very negative and you may be at a loss of confidence, but I do believe you'd rather take a beating in your emotions before you take one with your portfolio.

Now, overall, the book offers some nice stratagems for newer investors and is written in a very friendly style to keep people interested. The book is laced with the Gardners' personal style of humor(which I wasn't particularly fond of), but they did manage to keep the book fairly light-hearted and easy to read. With that said, I believe a key flaw of this book is that it makes achieving market-beating returns seem fairly easy.

Would it be feasible to believe that anyone could suddenly start playing NBA quality basketball were that person to read and follow some simple exercises in a book entitled "Play Basketball like Michael Jordan"? How about "Tiger Woods in 20 Minutes"? Yes my friends, it is very possible to play pro ball by doing my secret exercises for only 20 minutes a day, because in my new book, I have outlined some very secret and powerful methods that will make your growth in talent and muscle EXPLODE! *cue slightly altered techniques found in a basic exercise manual wrapped around in clever and seductive writing.

The notion that someone can play professional, all-star level ball by reading a book and following simple exercises would quickly be dismissed as utter BS. But in the world of investing, 'secret methods,' 'the methods of the pros,' etc. etc., always seem to entice new investors into buying a $15 manual to learn the secrets to beat the market. Maybe Peter Lynch can get by on beating the pros by looking at investments only a few hours a week because his decisions are built on experience... It may be easy for a professional bodybuilder to lift 350 lbs, but does that mean the average man can expect to do the same? To suggest that the newcomer can beat the pros by spending only a few hours a week and using a very simple system sounds quite like the 'pro ball' scenario, no?

You certainly won't get consistent market beating returns by following the very scanty guidelines offered in this book. Another area of fault with the book is that, at times, it seems like you've just spent your hard-earned money on a big advertisement. The constant plugging of their website is extremely annoying to say the least. It almost seems as this book was geared to get you to join their website.

With all of that said, the book offers a decent, easily followed write-up of long term investing fundamentals. It's a nice overview of the subject of investing, and beginners will learn some good lessons, but by no means should they believe that by reading a couple of investing books and following the simple guidelines within should they expect to beat the market over the long-term. There's a reason most mutual funds don't consistently beat the market over the long-term. And no, it's not because the majority of mutual funds are run by complete dunces (some of you may tend to disagree). The objective of obtaining market beating returns isn't nearly as easy as it seems.

Rating: 5 stars
Summary: For the courage to invest well - read this book.
Review: The Motley Fool Investment Guide was written for me. It told me that I was not alone, that the "wise men" of the financial world were not always so wise, and that my ideas were not necessarily foolish. It gave me the courage and the information to make investmnent decisions.The term "fool" is used because many "experts" would have us believe that novices would be foolish to adventure alone into the investment world. The "Guide" shows the inadequacies of much current expert advice. After learning some very simple, but very successful, strategies, the term "fool" becomes a badge of honour. I am now quite proud to be called a fool. I am also richer for following the advice offered in the book. The Motley Fool Investment Guide recommends a range of strategies. At the basic level it suggests a simple formula approach to stocks listed on the Dow (adapted from O'Higgins' Beating the Dow). It cites data showing it's superiority over the indexes for the past 30 years. The guide maintains that this approach takes about 20 minutes a year but I think it's more likely to take 2 or 3 hours - still time effective! Some investors will be content with this. For the more adventurous, the guide explains how to evaluate and select stocks which are likely to grow in the medium term. Their advice is clear and simple; anyone who can read and do simple arithmetic can follow it. Much of it is similar to the approaches of Peter Lynch and Warren Buffet, but more easily understood and useable. Best of all, these authors are accountable. Their web site (http://fool.web.aol.com) lists all of their investments and the public can decide how effective the method is though monitoring it in real time. This takes courage and demonstrates how sure these authors are. Since beginning their portfolio on 4 Aug. 1994, it has gained 168.39%. The S & P 500 has made 72.18% over the same period (to 4 Feb. 1997). This book is a classic and worth every cent. Dennis Rose

Rating: 5 stars
Summary: Foolish stock-price growth is possible.
Review: The Motley Fool is easy to read, simple to understand and amusing. Yet, the more I read, the more uncomfortable I became. First, it is clearly written for the person with little or no investment experience and no business or economics background. That would seem to limit its audience. I felt at times like I was being talked down to, that this book was not for me. Second, the book gave good advice in some areas - Part II on mutual funds is probably the best. When it reached Part VI on shorting stocks, normally a very risky strategy, I became concerned for the newer investor. In addtion, this book would be more useful if the authors gave some guidelines on how much of one's portfolio should be invested and percentages for using these different approaches. While I say "bravo" to their attempt, I am concerned that what I call The Misconception Stall (making decisions based on incomplete or misleading assumptions) and The Communication Stall (not having the message heard or understood the way it was meant) run rampant here. For example, as companies move with their seasonal or industry cycles, different investment approaches are warranted. Dividend models tend to bring in value players and "bottom fishers" who are there because they are not expecting growth in the stock. Is this where you want to be? Also, there are actions companies can take, such as buying back shares at the bottom of a cycle and issuing shares at the top of a cycle that can result in more rapid stock-price growth than any of these approaches. I hope in The Gardner's next book they will address these issues more "fooly"! Also, new investor would find it very helpful to have a list of questions they should ask the company they are about to invest in. There is no substitute for asking the right questions.

Rating: 4 stars
Summary: Good intro for wannabee Fools
Review: This book is pretty good for first time or novice investors, the Gardner brothers discuss the advantages and disadvantages of different investment methods most notably: mutual funds, index funds, and stocks. Also it seems these Fools (yes they like to be called that) like investing in Dow stock, much of their information regarding Dow stocks appears to come from Michael O'Higgins author of Beating the Dow. Another method that the brothers introduce is one of their own for picking out small cap growth stocks, here's what they look for:

Sales of less than $200 million
Daily Dollar Volume of $3 million or less
Low Price $5-$20
Net profit margin of 10% or more
Relative Strength (IBD) of 90 or higher
Earnings and sales growth for the most recent quarter of 25+ or more
Insider holdings of 15%+
Cash flow from operations should also be a positive number

This book is primarily aimed at beginning investors who want to hold growth stocks for a year or more, however a lot of this book is focused on them talking about their website www.fool.com

My favorite part of this book would have to be the chapter on Zeigletics: The Penny Stock That Never Was.

Reed Floren


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