I have kept an eye on The Motley Fool (TMF), a stock picking service founded by Tom and David Gardner, since its early days, mostly because it espoused a philosophy that went against the fashion of the day, and that philosophy was long-term investing. Buy a stock and don’t sell for at least three years, five is better, forever is a lovely ideal, if rarely achieved. Fundamental (that is, based on business fundamentals) investing is far superior to technical investing (based on dubious theories of how stock prices move). Don’t bother with market timing because predicting the market on a daily basis is futile.
I even joined their Stock Advisor service.
It should not be surprising that I was dismayed by this latest mail from TMF:
Tomorrow, David Gardner will release his next set of Best Buys Now in Stock Advisor.
And while you can trust that we’ll email you for every new investment recommendation, we wanted to remind you about an additional way to receive alerts for our latest recommendations — Motley Fool Text Alerts!
No matter where you go or what you’re doing, The Motley Fool is committed to bringing you the best stocks to buy wherever you are!
Because in a market where things can change on a dime…
We think it’s critical to have the most up-to-date information possible.
Uh, really?
This is just market timing without actually using the words. We’re looking at a market in tumult, in which today’s recovery becomes tomorrow’s crash, and all it’ll take is some other bit of bad news to really send it into a tumble – whether it’s pandemic-related, or a revelation about Big Finance screwing up once again.
These sorts of things aren’t predictable, and yet here’s TMF clearly trying to predict precisely those sorts of events. Incidentally, TMF’s Stock Advisor service was badly burned when they recommended Luckin Coffee (LK), a Chinese coffeehouse chain. Following an announcement of massive fraud at the company, the stock price dropped 90% from the price when Stock Advisor recommended it. (No, no pain here.) As Stock Advisor acknowledged, these are the sorts of events that cannot be predicted – and make the life of stock timers a living hell.
I suppose they might retort that younger members expect text messages, rather than email or simply remembering to visit TMF to see the latest recommendation. However, as you can see in the quote, they are clearly selling it (just a phrase, not literal) as an important part of the investing experience.
Which is just utter nonsense.
In combination with the lapse of their portfolio tracking service, which they claimed was done in order to give better service (eh? what? do you think we’re fools? Oh, wait…):
We remain committed to helping you track your returns, and that’s why we’re retiring this tool – because we think we can do better. We are exploring other ways to help you track your returns.[1]
That was back in October. It makes it harder to take TMF seriously. When the philosophy goes out the window, it raises suspicions that money – them getting there’s, namely – has become the number one motivation of TMF, and not educating the investor, as was their original primary purpose.
So much for their roots.
1 Yes, I wrote a letter of complaint several months ago. No response. Another black mark on their record.
