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Author: jackcrow Big gold star, 5000 posts Feste Award Nominee! Old School Fool CAPS All Star Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: of 609  
Subject: Re: "Wise" marketing from Tom Jacobs Date: 3/20/2002 11:53 AM
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In his March 19 "Sizing Up the Rule Breaker," Tom Jacobs feels the Rule Breaker has done well because it has out performed the S&P 500 and NASDAQ. However, in 2000 the portfolio lost over half its value, and it continued to loss money in 2001 and 2002. Those readers who jumped on board in early 2000 have lost over half their money.

Sense inception the portfolio has outperformed the market so this theory, style of investing works, so far. That's the point. Its true it was worth more previously but the brothers Fool have always been honest about their long term "buy to hold" strategy. So they are willing to take the lumps that come with that approach. They also warn other investors about those lumps.(not as well as they should have IMO, but then again when they wrote their books the market was going nuts)

No one can predict the exact top or bottom of the market which is why they choose to ride the highs and the lows.

The Rule Breaker investor has only 43% of the money he invested in early 2000. To make up a 57% loss requires a 131% gain. It will be years until the new investors are back up to even, or old investors are back up to what they had at the end of 1999.

I truly Foolish investor would have made their own choices and quite possibly outperformed the RB port over that period of time. I really Foolish investor would have cut their losses early and wouldn't have ridden the stocks to the bottom. The brother's Fools also point out that you should sell your losers before they hurt you to much. That's the balance any long term buy and hold strategy has to strike. When do ride it out and when do you pull the plug kiss your boo-boo's and look somewhere else or for a better buy opportunity if your sure this stock is a RB.

The market corrected, so what, it happens, get over it. Its not like the fools caused the correction, they were 'victims' of the correction like everyone else invested at the time. We are at or near the bottom its time to buy those RB's at basement prices, not crying over a normal reaction to an overvalued market and sector.

jack


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