My worst investment has been my subscription to Alpha, a service opened by TMF less than 3 years ago. It was meant to be a hedge-fund-like service that would combine longs, shorts, commodities, and options to consistently achieve positive results with a long term orientation.

Since inception, the portfolio is down about 30%, which has been very painful, as I invested a significant amount of my money with Alpha. The Alpha portfolio itself is down even more, about 34%, but I declined to execute some of the suggested trades, so I'm faring a bit better. Now, Alpha is being "wound down" because the lead advisor decided to leave and there was no suitable replacement.

So, I will be abruptly liquidating what was supposed to be a long-term portfolio because The Motley Fool left me dangling. It remains to be seen whether my total loss on this misguided adventure will be capped at its current level of the $6k fee to join Alpha plus the 30% the portfolio is already down, or whether dumping the positions will deepen this loss.

What is the lesson here? What mistakes did I make that I can learn from? Clearly, a lack of due diligence. I never thought Alpha would be a one-man-band, or I wouldn't have paid the fees, and much less risked my capital. I assumed, without verifying, that The Motley Fool was a responsible organization, and that it would be a good idea to trust them. In this instance, it turns out that they failed to put in place the measures required to ensure their customers (me) would get what they paid for. A not so far-fetched business risk materialized in the way of a key employee leaving and they had no useful way to react.

I am a MF1 subscriber, and have significant capital at risk based on other MF services. My next step will be to assure myself that this cannot happen again, based on actual information rather than poetic PR blabber. Unless this belated due diligence is satisfactory, I will evaluate my options to disentangle my portfolio from The Motley Fool before the next risk materializes, and seek advice elsewhere.

Juan M Villaveces