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Author: Hubris Three stars, 500 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: of 76106  
Subject: Re: Financial Planners Advice Date: 9/14/2007 2:16 PM
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I have been a HG subsciber for a few years now, have a very significant portion of my assets in HG picks, and the results BLOW AWAY the index fund returns.

I don't mean to insult LGM2007, but IMO this is really dangerous advice. You are correct in that I don't subscribe to hidden gems, but just a quick look at this splash page makes me literally cringe (you can get there by going to the TMF home page and clicking on "hidden gems" in the far left column):

http://www.fool.com/shop/newsletters/04/index.htm?source=ihgsitltn2000001&authed=n

It's the epitome of the marketing-driven message the Fool used to decry, "send us your money, we'll give you hot stock tips". Over the past 15 years or so, the Fool has had many public portfolios where they invested real money and openly showed how small investors could manage a portfolio. Unfortunately for the Fools, many of these ports trailed the indexes and some lost quite a bit of money. I would really encourage you both to read this thread for reference:

http://boards.fool.com/Message.asp?mid=18626366&sort=whole#18628608

It's exciting to make money, and you feel like a genius when one of your stock picks does really well. Believe me, we've all been there. And I have little doubt that Warrren Buffett, if he started over with a small stake, could rack up 50% annual returns for the rest of his life. I also have litle doubt that you (and I) can't. Actively investing is more or less a full time job (or a second full time job if you work for a salary too). The Fool hired full time people to run its portfolios and despite that, the collective historical returns up until they closed those portfolios in 2003 were mixed. If the people the Fool hired full time to do it aren't comfortably beating the indexes, how confident are you that you can?

Please, please, please be careful.

Cheers,

Hubris

p.s. Since I spent this entire post basically criticising the Fool, I should point out that there is some really good advice here. The intro stuff on how to get out of debt and how to approach your finances is generally really good. The message boards are full of a lot of helpful people and the actual number of content experts here on various topics is amazing.
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