Skip to main content
Message Font: Serif | Sans-Serif
 
No. of Recommendations: 10
Badsin:

Really, really well put. One of the reasons that I had been resisting going the route of Return on Invested Capital is that it is quite difficult to calculate, and somewhat labor intensive.

I'm completely with you and the sentiment that we don't want to overengineer here. Albert Einstein once said "make everything as simple as possible, but no more so." (I'm paraphrasing) This is what I want to achieve with Rule Maker, I want to make it a good teaching tool, one that is accessible to as many people as possible. But we can't make it so simple that it is useless.

That's the problem with sloganeering, for example. The Motley Fool has long said that you are the best person to care for your finances. I believe that this is true, but one must recognize what we are NOT saying. This in no way means "anyone can select stocks". It does not mean "beating the market is easy". It most certainly does not mean that you should completely cut yourself off from any professional financial advice.

We beleive in retaining and paying for professional counsel WHERE IT ADDS VALUE. Most full service brokers and actively managed mutual funds fail to do this. IN NO WAY does this mean that one should pull money from a broker and run willy nilly into picking stocks for one's self. There are plenty of interim steps: determining one's risk tolerance, a frank assessment of one's own abilities, risk assessment, enjoyment and time limitations in managing one's own accounts. Anyone who does not honestly believe that he or she lacks EVEN ONE of these characteristics would be well served, maybe even better served, to seek out a low cost Total Market Index fund.

We believe in financial planning, we believe in accountants, we believe in trust and estate planning. But that term "you are the best person to care for your finances" has been construed by many to assume the meaning that we believe in none of these things. It is oversimplistic, and thus it is scary how damaging it can be. It scares me to death whenever anything that I or my colleagues write gets misconstrued, but it happens every single day.

So I hear you, loud and clear. The power of the Rule Maker is that it will greatly lower the number of companies that one needs to sift through. You need not depend on CNBC or the popular press to get your ideas. You can simply notice that many people you know drive the extra mile to go to an Outback Steakhouse rather than some other closer option and then think "wow, that's an advantage. I wonder what Outback's economics look like?" But you've got to do some work. "People love Outback" in no way automatically means "Outback is a great investment".

The steps of Rule Maker are an attempt to add a framework to the middle steps. I may overshoot, for which I hope once again to get messages like the one above. I in no way want to undershoot though. The reality is that picking individual stocks takes some work, and that work includes the financial statements. If you want I'll be glad to recommend some excellent resources for helping people get more comfortable with them.

Thanks a million, badsin.

Bill Mann
Print the post  

Announcements

When Life Gives You Lemons
We all have had hardships and made poor decisions. The important thing is how we respond and grow. Read the story of a Fool who started from nothing, and looks to gain everything.
Contact Us
Contact Customer Service and other Fool departments here.
What was Your Dumbest Investment?
Share it with us -- and learn from others' stories of flubs.
Work for Fools?
Winner of the Washingtonian great places to work, and Glassdoor #1 Company to Work For 2015! Have access to all of TMF's online and email products for FREE, and be paid for your contributions to TMF! Click the link and start your Fool career.