Ask HN: Is the Motley Fool credible?

https://news.ycombinator.com/item?id=19225824

by jason_slack • 7 years ago

7 10 7 years ago

news.ycombinator.com

Over the last decade, I occasionally look at The Motley Fool.

However, they send a lot of e-mails each day with "Rare Buy Alerts" but you have to be a a member of their "Advisor" service to see it or "All In" alerts, etc.

I've read a bit of the history on Wikipedia: https://en.wikipedia.org/wiki/The_Motley_Fool They are rated a top place to work and employ over 300 people.

Does anyone have experience with them? How do you find their advice? Are you a paid subscriber?

PaulHoule• 7 years ago

It is hard to find anyone who talks about stocks in public that outperforms a dart at picking stocks.

The basis for that is the "efficient market hypothesis" which is not 100% true but is fairly close: stock prices already incorporate the judgements of many people who are trying the best they can -- thus you can go bankrupt trying to fight the ticker.

There are people who pay off doctors, nurses, etc. at hospitals that do clinical trials and they know something you don't know but if they said anything about it in public they would go to jail.

I find the Motley Fool's style particularly annoying because they always hem and haw which makes it sound like they are thinking it over carefully but in reality they didn't take a stand at all.

scarface742• 7 years ago

It’s statistically always a bad idea to try to buy individual stocks or actively managed mutual funds. Most professional stock pickers including mutual fund managers don’t beat the market. Just put money in an index fund or index ETF.

This isn’t just my advice:

https://www.cnbc.com/2018/01/03/why-warren-buffett-says-inde...

http://www.aei.org/publication/more-evidence-that-its-very-h...

EDIT: Clarified and added “actively managed” mutual funds.

JoeAltmaier• 7 years ago

Its like the sports-prediction con. Send a letter to 1024 people predicting the next Yankees game. Half, you say they'll win, half you say they'll lose. The game happens, send another letter to the half you 'predicted' correctly, predicting the next game the same way.

After 6 games you have 16 people who've seen you 'predict correctly' 6 times in a row. Offer the next letter to them for $500 bucks.

So, enough stock-prediction monkeys making enough predictions, you're bound to find somebody who's 'predicted correctly'. They'll want you to pay for their next coin-flip.

scarface742• 7 years ago

Of course I agree with you, but, I wish I could find a credible article where someone disputes the idea that most people should use index funds for the stock portion of their portfolio.

The closest I can find is that capitalization weighted indexing doesn’t give you enough diversity.

https://money.usnews.com/investing/funds/articles/which-are-...

remyp• 7 years ago

The conventional wisdom around here is that you can't beat the market, it's efficient, all information is already incorporated, you should buy index funds, etc.

This is good advice for the vast majority of people. It's possible to beat the market, but you're unlikely to do so unless you're backed by significant capital and it's what you do for a living (see: Rennaisance, Two Sigma, Citadel, etc).

Ask yourself this: if you had the hottest of hot stock knowledge (and could legally trade on it), what would you do? Keep quiet and buy the stock yourself before word gets out, or sell the advice to a newsletter audience?

jason_slack• 7 years ago

Yeah that I get. I was more asking about the source in general since they pollute my inbox.

usgroup2• 7 years ago

Both?

marketgod2• 7 years ago

The issue I had with Motley Fool and other similar services is they have too many alerts. They don't take all their alerts either. Also, it's not as transparent as to when they are in or out of a trade.

IMO, if you want to beat the markets look into options trading, that's how I do it, rather than timing stocks, as the profits in timing stocks are much smaller and you need to spend a lot more capital to make the smaller profits.

An example is ROKU doing 100% this year which is amazing, or you could have bought options at different parts and made money. For example, I took this plan and did made 60% on it, but had to exit because of earnings [1].

[1] https://www.instagram.com/p/BtuuPGeAQ_j/

usgroup2• 7 years ago

If you’re hoping that there’s a service which for a low monthly fee gets you market beating returns, I have a bridge in London Id like to sell you :)

marketgod2• 7 years ago

We do this consistently. It's not hard to beat the market, just need to work at it. One easy way is the wheel strategy, but if you want really good returns, look at options trading.

Ask HN: Is the Motley Fool credible?

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