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It's a simple thing, isn't it? Invest, wait, cash out, retire. Ahh, the truth will win out in the long run, though. And the long run has turned into a marathon.

You're probably wondering why the market won't turn around, why every headline and television program sounds the death knell for investors with words like recession, downturn, negative, bear, bear, bear, bear.

Oh, shut up already.

We are where we are for some very simple reasons.

1. Buzz

Or lack of it, really. Buzz is, quite simply, what people are talking about. I mean people like you and me, like the guys and gals at the water cooler, the local gym, and the gas station. Buzz is what drives people as consumers, and it is what drives businesses and their products.

A quick example: The Elmo doll. Remember the butt-ugly red thing that could talk a few Christmases ago? Remember how EVERYONE was talking about getting one for their kid – except every store was sold out. Remember how Elmo made Today show – the long lines at your local Toys (Aren't) Us, frustrated, angry parents bemoaning lack of supply for heightened demand.

That's Buzz.

Apply that to 1997-2000. EVERYONE was talking about everything TECH. Tech, tech, tech, tech, tech. Internet, dotcoms, wireless, dvd, cellular, blah blah blah. That drove people into buying computers and software and internet services and web surfing, and, and, and, and.

Consider how many new monikers popped up in the last few years – ISP, AOL, Surfing, Spiders (no, not the investing ones), do you Yahoo!?

Look back at the rise in computer sales, look at AOL's huge subscriber growth, look at the millions of visitors to Ebay, Amazon, even the Fool.

That's Buzz.

Then, everyone started talking about how all these tech companies were going to make billions and billions of dollars, and how everyone should be buying these companies because they represented this thing called a (insert moniker) New Economy. And people like Henry Blodgett made substantial names for themselves, not because they were geniuses, but because what they had to say generated even more Buzz (and, naturally, wall street picked up on the buzz and created more buzzsters (that's someone who imparts buzz) to go out and generate even more buzz, like a horde of little honey bees attracting dollars with their words of buzz).

Investors followed. Money flowed. And the Nasdaq rose, and rose and rose. It rose on buzz.

Damn if it didn't fall on Buzz, too. Because now we have negative Buzz. All things bad. Bad stocks, bad economy, bad earnings, bad (insert economic term). And so, stocks have remained depressed. Rising briefly, falling back. All driven by the Buzz of the day. Cisco, Intel, Microsoft, Ebay, Amazon, Nortel, Nokia – take your pick. All have been done in at one time or another in the last year by negative Buzz.

But Buzz is only the first part of the equation.

2. Confidence.

This is the second, and equally important element. Jeff Fisher (TMF Jeff - http://www.fool.com/portfolios/RuleBreaker/2001/rulebreaker010820.htm) was talking about the psychology of the market. Confidence is what we all had (regardless of what inspired it) over the previous three and half year. You were hard pressed to find a bad investment, weren't you? (Not that it was impossible, just that money went everywhere).

But the free-fall for the Nasdaq has destroyed that confidence. (unless you are one of those “SELL CISCO AT 16.33 EXACTLY 10:02AM” posters that seem to have proliferated here in Fooldom). Now where do you put your money? Who's making money? Who's selling product, gaining market share, growing their company exponentially? When will the bear return to hibernation?

Who the hell knows?

I do.

Follow the Buzz. When the buzz returns, it will stimulate confidence. When confidence is stimulated that will translate into faster, and greater consumer action (including investment activity).

Now for some hard points.

First, I think it's ridiculous for people to talk about the inability for the market to rally. When you pull several trillion dollars in investment value out of the market, it's going to be hard for the market to rally.

For those who may be a little confused about the ability for the market to go up or down, here's a great story from Morningstar, with a hypothetical example revolving around mutual funds (inflow/outflow).

http://news.morningstar.com/news/MS/Strategist/inflowmyth.html

So let's think for a moment:

Investor A (the public) gets Buzz fever, and, further buoyed by market confidence (because the buzzsters are saying the time is NOW) rushes to the market with money in hand.

Investor B takes the money, puts it in his pocket and goes to the bar. Over and over and over and over.

And suddenly you have lots of Investor A's out there who have paid $60 for Cisco, and $100 for Intel, but, as they now become the Investor B's they find the new Investor A's (which are really the former Investor B's in disguise) are only willing to pay, $50, $40, $30, $20 – for Cisco (or $90-$80-$70-$60 etc. for Intel, or every other stock, for that matter).

And so what happens is Investor A/B either: Petulantly refuses to sell his shares (which are now worth about 20% of their original value), or sells for a loss.

In which case Investor B/A has made money up, and he's made money down. And he's the only one.

So, now the Investor A's of the world have lost 30-90% of their stock/portfolio values. There's only one way (excepting the lottery) to make that up – income. (They ain't makin' it from dividends or returns, right?) And to make matters worse, the economy (which has fallen victim to negative buzz) is producing layoffs, lost jobs, dead dots, closed companies, take your pick. In other words, no confidence.

Further, the average Investor A is in no hurry to lose again – right? So what possible impetus is there for him to buy Cisco at 16, or Intel at 40 (or any stock at any price); compounded by the negative buzz and zero confidence…

It's easy to see why the market isn't moving.

Here's something else to think about: one of the tenets to investing (and there are a hell of a lot of them) is the movement of the market in correlation to the market's volume.

We'll look at the Nasdaq for this example, because if you look at a three-year Nasdaq Composite chart you will understand what I am talking about even better:

http://quote.fool.com/Chart/chart.asp?currticker=$COMPX&symbols=%24SPX%2EX%2C%24INDU%2C%24COMPX%2C%24RUT%2EX

When the market moves UP or DOWN on substantially increased volume, that typically indicates buying or selling on the part of institutions, not individuals. When the market moves up on weaker volume that typically signifies individual money flowing to market and not institutional. So go look at the three yr Nasdaq Chart. What do you see?

Look at the long increase in volume heading into 2000 (starting back about Oct 99) That takes the Nas from 2800 to 5000. From March to April you see a V in volume and the Nasdaq (twice hitting the 5k point, the second of which is my focus now.) See them big spikes in April and again in May? See the Nasdaq falling all the way to 3000? Institutions – bailing out. (Or Investor Bs)

Now look at the runup through Oct 2000: see how much lower, how much weaker the volume is; particularly the August to September timeframe, volume in the 1.5 million share range, and the Nas moves UP from 3600 to 4200…(and wasn't everyone breathing a sigh of relief). Then, as the volume increases (and institutions sell into possible renewed market confidence), the market falls, and falls, and falls.

December 2000 – February 2001: market-defying logic? Probably not. First, Institutions lead volume up in another rally from 2300 to 2900 – investors aren't biting (the buzz is turning negative, confidence is eroded). February to May, lower volume churn, market falls to its lowest point, in the 1600s. (Institutions return mid-May, drive market back up over 2200, volume subsides, Nasdaq moves sideways-downward).

So here we are, August 2001. Volume is getting weaker, the Nas is trending downward. I say that's a good thing. It should be easy to spot the return of institutional money, and that can be a leading indicator for YOU as to when the market may (and I stress MAY) return to growth.

But that said, there's more to be thinking about. Specifically, Enemies and Perception.

1. Enemies

You have two: the media and the street (but since you're here you know about the street, thanks to the Fool and their in-depth incantations of the ways of the Wise, so I'll deal with the first)

The media is NOT your friend.

No they aren't, stop trying to convince yourself that they are. Stop it.

Think of it this way. The Fool tells you that the Wise are out to do what?

Make money. (Yours)

Fine. What is the media?

A business. Based on an advertising-revenue model (or, for print, an advertising and subscription model).

How does the media sell you on watching or reading their show/publication? With BUZZ and buzzsters.

Let's come back to Henry Blodgett for a moment. Truthfully he was an unknown until he made his incredible Amazon predictions a few years ago (the beginning of the Buzz); what happened? Every media person wanted his take, his predictions, and then they reported those predictions to you (to get you to Read/Watch);

And when you read or watched, you became a Nielsen, a rating, a subscriber, a number which was used to validate to advertisers the value of the placement of their ad on CNBC, or CNN, or NY Times, etc.

So beware the Media buzz. I've said before and so have countless Fools, shut out CNBC. These people are not helping you. They are costing you money. While they make it.

2. Perception

Seems everyone is down on investing. I have been. It's hard, isn't it? Watching something YOU built get taken apart without seeming rhyme or reason (other than 'over-valuation'). Perhaps the time is now to change our perceptions. Perhaps now is the time to start thinking about the next five years. Where can profits be made in that time frame? What companies are beaten down enough to warrant our attention? What companies will be producing BUZZ in 2002, 2003, 2006? No, I'm not a fortune-teller; but I bet they're out there.

And I bet they're just waiting to be found.

Equationally: (-buzz) * (-confidence) does not produce a positive. Or does it? Does it perhaps become this:

(-buzz) * (-confidence)/perception = opportunity

Make buzz work for you; watch for institutional confidence; use the media to point you in the direction of buzz, but ignore their siren calls; find the opportunity - then exploit it.

I believe the Fool is one place where you can do all of that. Don't you? Thanks for listening. (hope I wasn't talking to myself)
hutch
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I didn't manage to get all the way through your post, but I did agree with one thing you said.

<Oh, shut up already.>

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And so, stocks have remained depressed.

Nice commentary, but I wonder what statistics lead you to the conclusion that most stocks are depressed at all right now. They still look sky-high to me.


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Mabey not CSCO.
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HI hutch,I realy liked what you wrote. It is one of the few post's that get's down to the basics for me and human narure. Go with the pack or be out there. Well I am out there.I gues I am not very smart,since I think this is a very good time to invest for the long term. I started last year in august and thought I was doing good catching stocks on the down turn.Well as of today,I have "lost" almost half of my investment but I am still not worried.Am I dense? I realy wished I had more money to invest!




kraut17
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Most of this seems circular. For instance, the reason the market is down is because of a lack of confidence. The reason for the lack of confidence is because of the NASDAQ fall.

The same must apply to "buzz" since the buzz was at full throttle for quite a while even when the market was flat and then beginning its descent.

I'd call it a pyramid scheme. The buzz got people to buy, but eventually you run out of buyers.

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I read the WHOLE thing and my brain is is like mush.
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(-buzz) * (-confidence)/perception = opportunity

Make buzz work for you; watch for institutional confidence; use the media to point you in the direction of buzz, but ignore their siren calls; find the opportunity - then exploit it.
-------------------------------------------------------------------------

Can any of the 13 people who recommended this post give me any ideas on what this might possibly mean?

Thanks.



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<Right on Brother>
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Hutch, You said it all and in language that is understood, so I am awaitng the next positive Buzz and turning off CNBC.
Norma
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Jhutchinson wrote:

A LOT, including

"(-buzz) * (-confidence)/perception = opportunity"

MSHH ask for an explanation of this "equation". And of the entire post.

That's easy:

A lemming rationalizing it's behaviour on it's way to the cliff.

GG
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[(-buzz) * (-confidence)/perception = opportunity]

Given a situation where there is no buzz, multiplied by lack of confidence, which is cut(divided) by perception, presents(equals) opportunity.


FutureMillz
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I was pretty buzzed, until I read this.
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Short term:
Market is heavily influence by buzz, confidence, perception.

Long term:
Market is driven by earnings.

Though not the general rule, sometimes the short term buzz creates opportunities for companies that results in long term advantages. For example, could AOL or any of the dot com companies have grown as rapidly in the absence of earnings, if it weren't for buzz? Buzz drove up the stock price, which helped create capital, which was necessary for growth.

Few companies have the luxury of buzz anywhere near the degree recently observed with tech companies. Many companies have failed after relying too heavily on the shifting sand of buzz (and not just a recent phenomenon with tech companies). Ultimately, all companies are being required to, or will be required to deliver results.

For the most part, buzz is short term, moody, unpredictable, and fleeting. Ultimately we are a results driven society.
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BuildMWell wrote:

"Try this chart, same chart but "all data". This will show you the real picture. Long term, we are in a small correction...nothing more."

http://quote.fool.com/Chart/chart.asp?osymb=&osymbols=%24SPX.X%2C%24INDU%2C%24COMPX%2C%24RUT.X&symbols=%24SPX.X%2C%24INDU%2C%24COMPX%2C%24RUT.X&currticker=%24COMPX&time=all&uf=0&compidx=aaaaa%7E0&ma=0&symb=%24COMPX&freq=1mo&lf=1&comp=&type=128&sid=3291

Okay, given that this is a log scale, the exponential rise in the Nasdaq INDEX is very nice.

But I'm not sure that people who have experienced the corresponding exponential drop in the value of their portfolios would agree with you.

Something else to ponder as you gaze at this chart. How many of the companies that made up the index in 1975 are still in the index? How
many of these companies still exist? The index lives on in perpetuity. Companies, esp. high tech ones, come and go.

Finally, what does this index look like after one corrects for the loss of purchasing power of the US$ since 1975, ie., inflation.

GG
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<<I didn't manage to get all the way through your post, but I did agree with one thing you said.

<Oh, shut up already.> >>

AtlantaDon,

Usually I find your posts extremely interesting and thought-provoking. This post was just plain rude, and frankly surprising coming from you. I thought the original post was very well written and demonstrated how investor psychology can be a determinant in moving markets. Apparently, the other 53 people who recommended the post also thought it was worthwhile. I questioned whether to post this response, but in my opinion maintaining some degree of respect and civility on these boards is a good thing. There are alot of idiots on these boards that you can't really expect that of, but hopefully, typically solid contributors won't degenerate to that level.
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>>I thought the original post was very well written and demonstrated how investor psychology can be a determinant in moving markets. Apparently, the other 53 people who recommended the post also thought it was.<<

MDCigan,

So that's what that post was about-that investor sentiment can move markets? I was afraid that was the case.

Lord help us if 53 people-all who presumably have just lived through the buzz/sentiment driven Nasdaq 5000-have just discovered that markets can be driven by sentiment.

I don't know what else to say about that and so will just take AtlantaDon's good advice and shut up.

Mike
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Well, Considering it is a log chart, a steady growth rate would be approximated by a straight line.

Looking at the chart, three phenomena can be observed.

1. Recessions - These show as long period downward trends that happened in 81-mid 82, 83-mid 84 and mid to late 1990. Typically, there is a return to the norm taking about the same amount of time as the fall.

2. Correction - A sudden change that relocates the trend line. This is what happened in 1987.

3. Bubble - A sharp runup in prices over a period of time. The 81 and 83 recessions were preceeded by a bubble. The 1990 recession was not.

Depending on where you want to draw your lines, a trend line can be drawn from 75-87 where the correction shifted the line, and the new line goes from 87-96 where the slope increased. If this trend line had continued, the NAS would be around 2,200, and the post bubble recession started around April '01. Looking at the 81 and 83 post-bubble recessions they lasted as long as the bubble drop. If this is the case, the recession will last until Q2 of '02, and won't return to the trend until Q4 of '03.

Looking at the S&P 500 and the Dow charts, the correction of '87 was merely a return to norm. Looking at the normal trend line for the S&P 500, the return to norm will occur during Q4 '01 with anticipatd recovery starting in Q3 '02. The Dow, interestingly, hasn't dropped during the recovery phase, but rather stayed flat as the trend lind caught up. This will occur around Q4 '02.

All three charts show a deviation from the norm that began in 1996, and the climb stopped at the beginning of '00. One of the driving factors in this change in the growth curve was the "discovery" of section 401k of the tax code that allowed mid and small businesses to setup retirement savings plans for their employees. This pushed a lot of new money into the market. Combined with this was the opening of the internet to the public, which provided a new "street corner" for people to set up shop. These companies rushed to the public because the investment money was easily available. Q4 of 1999 was marked by a sudden jump in the NAS, which can be attributed to people and businesses replacing equipment and buying ahead for the possibility of a Y2K catastrophe. After the millenium rollover happened without too much trouble, there was a lot of extra "stuff" to be consumed, hence why nobody is buying.

Looking at the NAS chart again, if you draw the trend line from 1996 thru mid-1999, then the bubble returned to norm in Dec 00- Jan 01, and the bottom of the recession half is near.

Putting all this together, the new trend slope in 1996 is real because there are actual saving dollars (401k) behind it. This money was fairly evenly split between high tech (NAS) and old economy (DOW) until Q1 of 2000, when the credit rate hikes caused a lot of the shakier new companies fall out of existence. Now the big money players are looking more realistically at what companies are actually making money, and which ones stand little to no chance of being profitable any time soon. Hence the flow of money from the NAS to the DOW which has kept the DOW from falling like the NAS. The S&P can be viewed as kind of an average that includes both sides, and shows the money that is flowing to cash on the sidelines, as well as the slowing of the inflow due to layoffs and benefit cutbacks.

It is interesting to look at the trend lines, it is even more interesting to try to figure out what is behind the trend lines.

Steve
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JrByrdmann, thank you for the support. Your post is by far the most important one here...far more important that the silly one that started all this and which received 65 Recommendations as of this post.

Who can possibly think that "Buzz" was not a factor in 1987, or in 1983? Buzz is not what is wrong with the market today nor has it ever been. Because, there is not a damned thing wrong with the market now nor was there in 1987 nor in 1983. And, that is what the $COMPX chart actually shows.

To say that we have a problem today is just as silly as it was to say we had a problem immediately after the "crash" in 1987. Anyone who knew anything for real in 1987 just ignored the "BUZZ" then and they do again today. I have said it before on this board and I will say it again now. "We are on the curve." The market defines the curve and we are riding it. The economy gets ahead of itself at times and it corrects. Stocks get ahead of themselves and they correct...it is what makes all of this work!

I find it counter-productive to try to blame any of this on the Fed or on the Buzz or on the President or anything else. We are where we are because this is exactly where we are supposed to be. GOD, this is so simple and many people just refuse to see it!

So, thank you again for your insight. At least one other person sees what I think I see...and that pleases me. It is great to know I am not alone. Now, if you and I can just convince about 100 million other investors, this market will be back on track once again.
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I find it counter-productive to try to blame any of this on the Fed or on the Buzz or on the President or anything else. We are where we are because this is exactly where we are supposed to be.

Preach it!

Now, if you and I can just convince about 100 million other investors, this market will be back on track once again.

Oops. I thought you just said we were on track?!

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BuildMWell,

"Your post is by far the most important one here...far more important that the silly one that started all this and which received 65 Recommendations as of this post."

LOL. Until I read this I thought JHutchinson and BuildMWell were one and the same.

"Now, if you and I can just convince about 100 million other investors, this market will be back on track once again."

Well, I suppose that's one way to try to get one's portfolio back in the black. Good luck.

GG
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If I am reading you right. You are saying the Buzz or should I say lack of Buzz is the problem. Here where I disagree. I think the problem is the "tech bubble" was it built on nothing but empty buzz. I had seen a lot of companies with bad or no business plan being snatch up by hungry investors just because the CEO puts a .com after it name.

Even here on the Fool there was the buzz. The radio show each week proclaimed we are in a new era. Technology will rule the world. Forget about valuation and business fundamentals.

Then suddenly the buzz met hard reality. The truth is the market is a harsh mistress. Unless one knows what they are doing and have solid business plan, the market will chew you up and spit you out.
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JrByrdmann, thank you for the support. Your post is by far the most important one here...far more important that the silly one that started all this and which received 65 Recommendations as of this post.

Thanks for your support, but I also see the point of the many rec'd post, in fact one of them is mine. I didn't read that post when I wrote my earlier post, but have read it, and the referenced report, and now offer this addendum and answer.

Who can possibly think that "Buzz" was not a factor in 1987, or in 1983? Buzz is not what is wrong with the market today nor has it ever been. Because, there is not a damned thing wrong with the market now nor was there in 1987 nor in 1983. And, that is what the $COMPX chart actually shows.

I believe "buzz", or to put it more accurately, investor sentiment, was a part of the market in 81 and 83, and to a large extent in 87. However, I believe it plays an even bigger roll in the runup that started in 1996. Prior to the rise in popularity of 401k and IRAs, the average Joe didn't really have any idea of how the stock market worked (many would say this is still true, and I agree). As people started having their retirement plans in self directed plans, they started paying attention to the moves of the market, hence the rise in popularity of CNBC, et. al.

To say that we have a problem today is just as silly as it was to say we had a problem immediately after the "crash" in 1987. Anyone who knew anything for real in 1987 just ignored the "BUZZ" then and they do again today. I have said it before on this board and I will say it again now. "We are on the curve." The market defines the curve and we are riding it. The economy gets ahead of itself at times and it corrects. Stocks get ahead of themselves and they correct...it is what makes all of this work!

I wouldn't say we have a problem, but we do have a changed situation. The advent of the day-trader and cheap, online brokerages make the market a much more volatile place. You now have people with little attachment to the underlaying company who are playing games based on price fluctuations. Combined with this, you have people who don't understand the markets looking only at the y-y and/or q-q performance of their funds, so the funds are making short term trading decisions to make the annual or quarterly report look as good as possible. Throughout the runup, you had the neuveaux-celebrity, the market analyst, saying things like "new paradigm" and "good by even at these prices", thus convincing the novices (suckers, myself included) to keep throwing their money at the market. Everyone wants to buy, so the price keeps going up.

The Motley Fool is complicit in this runup. They convinced the uninformed that making money in the market was easy, and you didn't need a "high-priced broker" or mutual fund manager. Just pick the right stock and ride it "long term". Oh, they warned us to evaluate our investments to make sure the underlaying company was still sound, and that you shouldn't use money you would need in the next 3-5 years, but this was all in the small print. The headlines were BEAT THE DOW, BEAT YOUR MUTUAL FUND, and so forth. The cited such examples as $100 invested in Microsoft or Cisco when they first went public would be worth $X00,000 today. The part they skip is that for every Microsoft, there are hundreds of companies that left their investors with nothing.


I find it counter-productive to try to blame any of this on the Fed or on the Buzz or on the President or anything else. We are where we are because this is exactly where we are supposed to be. GOD, this is so simple and many people just refuse to see it!

I agree that trying to place the blame on any individual, or single item is a wasted effort. There are too many interrelated factors affecting the market to put the blame on only one or two things. However, it is a good idea to identify the factors in order to learn and be on the lookout for the warning signs the next time we start seeing a rapid runup.

As to the market being where it is supposed to be, that is not necessarily true. We are in the middle of a correction cycle that is bigger than has been seen (at least in the last 30 years), and the market is going to bounce around for a while before it stabilizes. This assumes that something else doesn't come along and create another big oscillation.

So, thank you again for your insight. At least one other person sees what I think I see...and that pleases me. It is great to know I am not alone. Now, if you and I can just convince about 100 million other investors, this market will be back on track once again.

One thing from the report linked in the original post that I would like to refute. The inflow of new cash into the market through 401k associated mutual funds and other vehicles did lead to the overall price increase. This new money had to be invested somewhere, increasing demand, so the price continued to rise until a willing seller was found. The example of A puts $10,000 in and B takes $10,000 out is overly simplified (the zero-sum game). If this were truly the case, the market value would stay constant. This is false in that it ignores the situation where where companies issue new stock (IPOs, Supplemental Offerings, Acquisitions, etc.), in which case, the $10,000 becomes operating capital in the underlaying company, thereby adding to the actual value of the market. This factor is what drives the long-term upward trend in the market.

The bottom line is that for numerous reasons, the price of the market got too far ahead of the value of the underlaying companies. At some point, it was inevitable that the market would correct this situation, and is now trying to find that level. Unfortunately, the average investor deals on the micro level, where part of the macro leveling may mean a total loss on the micro level. Painful fact, but it is reality.

Steve
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The Motley Fool is complicit in this runup. They convinced the uninformed that making money in the market was easy, and you didn't need a "high-priced broker" or mutual fund manager. Just pick the right stock and ride it "long term". Oh, they warned us to evaluate our investments to make sure the underlaying company was still sound, and that you shouldn't use money you would need in the next 3-5 years, but this was all in the small print. The headlines were BEAT THE DOW, BEAT YOUR MUTUAL FUND, and so forth.

Yes, the Fool got caught up in the fun as much as everyone else. But who says making money isn't easy? Making money IS easy. The Motley Fool answer is based on two fundamental principles: 1) index funds and 2) Staying in for the long term. Do you contest that that this simple formula is both easy, and has a very high likelihood of (far) outpacing inflation over the long run?

MF has always been clear that any further expectation requires 1) WORK 2) DILLIGENCE and 3) RISK, and if you are not willing or are unable to accept work and risk, your answers lie elsewhere. If we interpret this message to mean that we can make gobs of money by just following some formula, we've let our own greed distort the message. From my perspective, they provide a service, by empowering each of us.

Incidentally, other popular books have promoted stock buying to the public, and have been similarly distorted. For example, Peter Lynch wrote a classic book "One Up On Wall Street." A fundamental premise of this book is that the general public actually has an advantage over the professional investor (rather than visa versa). He told us we gain investment ideas in our daily lives. He clearly communicated that once you had an idea, you should look carefully at the numbers with a quantitative analysis. He is probably right in each of these theories, and people loved it. The typical response is to choose ones favorite store/business/etc and invest in it. Oops. That is doing just exactly what Peter Lynch told us not to do, which is investing without the due diligence. See, our tendency is to be greedy and/or lazy. We are long on dreams of profits, but when it comes to work too often we fall short.

Is this current situation the fault of Motley Fool or Peter Lynch? By all means, NO! Do I want Motley Fool or Peter Lynch to force me to wade through gobs of disclosures so that I can be legally warned of obvious dangers. Absolutely not.

Finally, are we really all that worse off? Remember, education is expensive, but if we are paying attention during class it usually pays off in the long run. Of course, the experience this past year is the education, and the stock losses are the expense. Don't stress too much, but do pay attention.
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