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Author: BeautifulPlumage Big gold star, 5000 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: of 14481  
Subject: Re: Investing on margin among falling knives Date: 8/31/2008 9:37 AM
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"...stop reading the Rule Breaker nonsense, and you are likely to do quite well." -- BP

I'm glad that has worked well for you, but it is hardly reasonable to dismiss Rule Breakers as nonsense for others....or any of the other MF investing "styles".

Rob



Rob, I don't know who is responsible for the RB stuff or how much it has changed over the years, but I think if there is any investing approach that it is entirely 'reasonable' to dismiss, it is the Rule Breaker one. It is founded on a belief that outstanding rule breaking stocks, despite being priced for perfection, will do EVEN BETTER than what is already priced in by a manic Mr Market.

I guess it is a hypothesis that is worth testing, but I have never seen any evidence that this approach works, quite the contrary. I think these would be good candidates for a short position, if it were not for the fact that the Market can stay irrational longer than you or I can stay solvent.

And the Motley Fool record for RB stocks is a catastrophe, only partially covered up by selective reporting of the performance of its stocks. Of course, since it is now a paid service, I may not be aware of some of the recent successes, but in general, it is a way of getting into terrible investments like Human Genome Sciences, Celera, Millenium Pharmaceuticals, that broadband Internet service that went bankrupt (forget the name), etc. Rule Breakers all, both in spirit and by official choice of the MF team. I think the reporting of the overall success of the RB portfolio has been seriously fraudulent, retrospectively dubbing some of the good picks (AOL, Amazon IIRC) as RB picks and dropping the accounting when the portfolio went seriously downhill.

IMO, contrary to the general usefulness of the MF site and philosophy, the RB approach has done a serious disservice to investors, and it is perfectly reasonable to express that opinion.

Regards, BP
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