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No. of Recommendations: 7
It is true that Yahoo is not a Rule Maker. But the Rule Maker strategy is a complete failure - and has no real hope of ever beating the market. Companies that meet the Rule Maker criteria are big established growth companies, and everyone agrees their prospects are great - and so they are priced accordingly. The returns from the ones who live up to expectations will be offset by the 20%-40% who, over 5 years, encounter difficulties and their stock prices get crushed.

My first reaction to your "complete failure" statement was to scream "HERESY" at the top of my lungs (to the great consternation of my office-mates who thought I was working). But as I think about it ...

Lately, hasn't TMF basically admitted that it has very little hope of beating the S&P500 by its mile-stone fifth birthday? Hasn't the RM portfolio guru-group recently admitted that its earlier poo-poo of any valuation analysis was a big mistake, by lately grafting a "2x5y" component onto its criteria? Don't I wish I'd thought about all this a little more critically before I plunked down good cash on TMF books, seminars, and the stocks that wisdom pointed toward?


(Seriously, in light of the last few months of articles from TMF, don't we ALL need to take some time to step back and think critically before going forward with the Rule Maker strategy, even as recently amended? We might have been right all along, but then again, we may just all be crazy. And it seems to me that the best and highest tenet in Fooldom is for each of us to do our own research, and take responsibility for our own decisions.)

Thanks for a good post, banjo.

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