I can see it now: Coming soon! Make a ton of cash. Our top picks for the coming year! Limited print pieces! Get your's today! In 2006, our top pick averaged (some percentage here) better than the broader market. 2005 returns were even more amazing and in 2004…. yada, yada, yada.The article run today on DHB ticks me off. Particularly this paragraph: “It's a big fall from grace for a company that had once been chosen as a Watch List stock for Motley Fool Hidden Gems, but it quickly lost favor as ever-new revelations of greed and excess came to light.” (entire article http://tinyurl.com/kp9hu). No mention of DHB as a top Stock Pick for 2004. No mention of Tom Gardner making it the “riskiest recommendation in Stocks 2004.” Tom ran great arguments like, “What's so great about Interceptor Body Armor? It's everything that the Vietnam-era flak jackets, which too many soldiers wore into Afghanistan and Iraq, are not. Interceptor Body Armor has the capacity to stop bullet rounds fired from assault rifles. It's been credited with saving the lives of dozens of the more than 400,000 soldiers who wore it into combat last year.” (from 2004 Stock Picks).Since that recommendation, little-f fools who invested $1000 in DHB (@ $7.25 per share) have seen their investment turn from a three-bagger to a quarter-pounder. Yep, at $2.25 a share, you are the proud owner of less than 1/3rd your invested amount.Don't hear what I'm not saying. Stocks are risky. Small caps come with their own unique problems. I'm not even beating up on Tom Gardner. Moreover, I turned a two-bagger from my DHB holdings, buying in at little over $8 and selling at little over $16. I've made money on CRDN and STAR, past recommendations to the Stock Picks. But I'm also in the red on other companies, like DSWL and others.My problem is the way that success is touted in big bold letters, but failure slips to the sidelines. The smallest concession would be enough, something like, “Motley Fool did recommend DHB in their Stocks 2004, a recommendation that was risky then and, in retrospect, very little-f foolish.” But nothing. The average Joe who wandered on to this article would have assumed, “Wow. Look at how they could have saved me from myself.”I'm left with two conclusions. Either the message is that Stock Picks 20XX are little more than the Motley Fool's version of water-cooler conversation—to which you and I become privy by buying a cup at $50-60; conversation I should listen to with suspicion at best—or else, the message is that to really know the value of a stock, I have to subscribe to one of big-hitting boards. Meanwhile, all the folks who hope to get in on a few good stocks, foolishly buy copies of Stock Picks 20XX and take them at face value. And then folks like TMF Cop tout the success of the Fool service to identify the short-comings of DHB. Oh, ye poor foolish Stock Pick 20XX buyer! Had ye but known. You know that little link on the side of the Discussion Boards called “Your Dumbest Investment.” Maybe it's time to move that to the Fool homepage and call it, “Our Dumbest Recommendations.” I guess until then, my Foolish recommendation for the day is this: When you read “Stock Pick 20XX” translate it “Buyer Beware!”
Best Of |
Favorites & Replies |
Start a New Board |
My Fool |
BATS data provided in real-time. NYSE, NASDAQ and NYSEMKT data delayed 15 minutes.
Real-Time prices provided by BATS. Market data provided by Interactive Data.
Company fundamental data provided by Morningstar. Earnings Estimates, Analyst Ra