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Author: cocomurph1 Big gold star, 5000 posts Old School Fool Home Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: of 46814  
Subject: Re: TMF's Future-Could Less Be More? Date: 10/12/2005 11:13 AM
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Hi Don!

Yes, TMF wants to grow, like any good business. One key issue, however, that also faces all businesses is whether or not the growth is "healthy" or unhealthy, longer-term. Selling lots of subscriptions short-term won't matter much if there really is "pick quality degradation"...and thus poorer investment results by subscribers...and thus longer-term subscription churn.

To that point, here is an excerpt from a post I made to TMFCop:

More to the point, I think that each individual newsletter is approaching the point where the number of active picks can lead to a gradual degradation of quality over time...hurting investor's results, and thus, TMF. Whether it's Tom, Dave, Bill, Mathew or Philip...the top guys only have so many hours in a day....and if they are picking the kind of companies that we should hold for 3-5 years ( or more )...and these companies prices constantly vary from over to under-valued over time, they need to be watched/evaluated for opportunistic adds/sells, as well as business case altering strategic events...both good and bad.

It's been said that an individual investor can only analyze/keep track of 15-20 stocks in depth. I don't know whether that's right or wrong...but there has to be some limit.....and IMHO, certain analytical functions ( primarily the more soft, intangible, judgemental ones ) can't/shouldn't be delegated by the top level talent.

While I fully subscribe to TomG's HG diversification strategy for small caps, as well as other stocks, I just think that addressing the inevitable train wreck that will occur from reco overload will be in the longer-run interests of the majority of TMF newsletter users and thus, TMF.

Of course, this hypothesis rests on the assumption that the majority of TMF subscribers don't do in-depth FA/DD that goes a level beyond what TMF does ( either because they don't think they have the ability or the time ). If that assumption is wrong, then I stand corrected, and the TMF picks can multiply ad infinitum, since they will be primarily used as an intial screening device...sort of like we use the BMW Method charts as a starting point for identifying good candidates for FA/DD.

Does TMF have any idea as to how their existing subscriber base splits along these lines? And how about potential subcribers? My marketing gut says that the mass market ( and the most long-term money for TMF ) has to among the less sophisticated, time strapped investors.

It's a fine line to walk...that of pleasing two market segments...maybe that distinction offers some hints of how TMF newsletters might be segmented/differentiated in the future?



Best regards,

Murph

( who sees different TMF product needs between newbies/smaller portfolios and veterans/larger portfolios.......as well as FA/DD'ers and those that don't )
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