Friday, August 08, 2008

Why is "The Motley Fool" Still in Business?

I've always wondered how "The Motley Fool" remains in business since the 2000-2002 bear market. Many of the companies they praised in the late 1990s bull market as "breaking the rules" ended up crashing and burning. The model seemed totally broken. And then there was the nonsensical strategy called "The Foolish Four". Most of their comments that I read either state the obvious or seem to lack the relevant context. When I saw their headline: "Buyout or Sellout?" under the headlines for PeopleSupport, I was hopeful that someone else was outraged by this takeover. Don't know why I gave them the benefit of the doubt. They rated PeopleSupport highly but were really happy about the buyout. They completely omitted any reference to the previous $17 buyout that was rejected by management.

As I was thinking about how useless TMF is, someone pointed out to me two adjoining Motley Fool stories about Capital One Financial with diametrically opposing conclusions. Either Capital One Financial is a huge value trap that should be avoided or a low-rated stock that deserves your support. Certainly amusing, not very educational, and definitely not enriching.

In more positive takeover news, Newscorp raised their takeover offer for NDS to $63. That's a nice gesture with no other competition to buy out the company!

1 comment:

pfstock said...

Sometimes I wonder the same thing... I used to follow the Motley Fool, but I don't anymore. I even own three autographed copies of their books. Nowadays, it seems like the best part of their writing is the headline itself. The articles typically go downhill from that point.