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Thanks for your fine post. (And by the way, I apologize for vanishing from here for sometime. One conclusion is that I couldn't show my face anywhere until Yahoo! got above $18. Another -- and the more accurate -- is that the work to get The Fool on its right footing after a terrible business year has been substantial. Either way, I apologize for not being around as a poster. . though I have read the notes here.)

I agree with your instinct not to overhaul the Rule Maker strategy, even through some dismal returns. It's a baby-and-bathwater scenario. What the Maker approach has succeeded at is finding companies that weather storms.

Through the near and sometimes-total demise of technology companies, our businesses are surviving. Even Yahoo -- with its cash hoard and managed costs -- is rebounding. Cisco is stronger than Lucent will ever be again. Microsoft has, it seems, cleaned its plate of competition.

The approach does a good job of avoiding the disasters. We aren't Kmart owners. Our businesses are, it seems to me, built to last for a very long time.

But our returns today are, nevertheless, unacceptable. I take responsibility for the poor performance of my money here. Not only did I have a healthy hand in the decision making, I also laid down the philosophy for the portfolio, and I put my money into it! There are obvious disappointments here.

The challenge, though, is to stick to it. To learn. To improve. There's still $30,000 in the portfolio. There is still new money being added. And I think Bill Mann is going to bring learning and improvement to the portfolio. The changes he'll make will be consistent with the underlying approach. But he'll add a few new wrinkles, as well.

Obviously, where the portfolio and approach have gone wrong is in not tending to the value of the businesses we buy and own. I don't want to hop from extreme to extreme, though. . . there is a baby in the bathwater here. We simply need to focus more on the pricing of companies -- both its art and science. I think Bill can do this in a straightforward, effective way.

At some point in the next few weeks, I'll be writing a Rule Maker Portfolio report. The demands on my time elsewhere at The Fool have been somewhat overwhelming. We are a company moving into profitability with a wonderfully expansive service and a stunning collection of minds across these thousands of discussion groups. It has taken a bite out of more of our lives here at Fool HQ than we could ever have planned for or desired. But we're proud of we are and where we're going.

For me, that thinking applies to the Rule Maker Portfolio as well. Our disappointments here have not discouraged me from investing, thinking and learning together. Some of our nation's greatest investors took very painful licks, then regained their footing and assembled a startlingly strong record of winning and teaching. I hope our work here, with Bill's leadership, will amount to the same.

Thanks for your note.

Tom Gardner, Fool
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