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Nerissa Baltodano says...

I like the way the Motley Fool organized the book into several chapters (Value, growth, small cap, etc).That does make good sense, but I found the information in each of the chapters to be of not much value.Everything in the book can be readily accessed on the internet or specific websites (Vanguard, Fidelity, etc).For people just starting out with personal investing, this book could be your rock, but for seasoned person, there is not much new.

Posted on August 17, 2011

Buddy Reinke says...

My personal and professional focus is mainly on trading, but I do periodically act as an investor as well. That being the case, I thought I'd give this book a read to see what the popular Fools had to say on the subject. I didn't come away particularly impressed.



First of all, the whole book is an advertisement. The reader is constantly being sold on Motley Fool services of one kind or another. Of course you know going in that the book is going to promote Motley Fool, but it doesn't need to be so continuous and overt. Makes me glad I didn't actually pay for the book.



Secondly, there is a painfully obvious error (or rather set of errors) made at the outset of Chapter 3 when the authors are trying to preach the advantage of buy-and-hold investing over active trading. I take no issue with the general argument made about how taxes and transactions costs make active trading more of a challenge than buy-and-hold investing. Their example to demonstrate how this is true, however, is so painfully incorrect in its math and interpretations as to be farcical. Such obvious mistakes makes me wonder about the attention to detail of the Fools, which is a problem when you consider company analysis and stock picking is their proported focus.



Thirdly, while there are some good elements to what the book says, most of it is stuff that's been said before many times in other places - better places. If you're really interested in the subject of stock investing, the first place I would go is One Up On Wall Street, by Peter Lynch. I read that book back when it first came out - a looonnnggg time ago - and found it extremely useful. There's a reason it's one of the best selling stock investing books of all time. Of course there are also loads of Buffett books, but I'm not going to recommend any of those because frankly there aren't many who can invest the way Buffett does.



Bottom line, look elsewhere.

Posted on August 18, 2011

Miriam Correau says...

If you are a fan of infomercials on TV, then you will absolutely love his book.The Motley Fools (David and Tom Gardner)go full tilt to push their website, services, premium services, methodologies, etc., while also providing a basic background on investing.



While there is a lot to be said about the basic information provided (much as can be said about the infomercials on TV), you also need to understand that David and Tom have a product to sell to you.



The book is a fast read and as long as you keep in mind the underlying sales pitch, you can gain a basic understanding of investing principles.The sections are short enough to provide information without putting you to sleep.This also makes it very easy to go back and reread sections that you have questions about.



This is one book that I would suggest that you pick up from your local library to read.

Posted on August 18, 2011

Magdalene Behl says...

Wildly successful?Maybe wildly successful in their marketing and getting lots of members for their portfolio but not for their investment choicesAs a paying member however I can tell you that as of this writing the portfolio is doing only marginally better than the S&P 500 and even that is because they had a lot of their money in cash while getting the program rolling.Perhaps over time their investments will be wildly successful but it would be a gross exaggeration to call it that now.It is just too soon to tell.

Posted on August 19, 2011

Vicky Layng says...

My BS meter first started going off when they talk about how their various investing strategies beat the S&P-500 "over comparable period."Over what period?Years, months?They don't say.Without any track record we can't expect to take them seriously and I'm sure if they were beating the S&P over a long period of time they would provide specifics.



They proceed to explain various investing strategies such as investing in blue-chip companies, small-caps, income (dividend), growth, and foreign stocks.While they do provide some interesting studies that tout the benefits of their various investing methods, the information they give you to make informed decisions is virtually nonexistent.



For example, these are the qualifications needed to invest in a growth stock - they call it the Risk Takers and Rule Breakers strategy:



1. Top dog and first mover in an important, emerging industry

2. Sustainable advantage gained through business momentum, patent protection, visionary leadership, or inept competitors

3. Strong past price appreciation

4. Good management and smart backing

5. Strong consumer appeal

6. Grossly overvalued, according to at least one constituent in the financial media



Yes, they expand on these areas a little (3 pages) and give a couple of past picks but that's it.Do you really think that is enough information to separate the wheat from the chaff and pick a market beating company?And, seriously, are you going to wait and *not* invest in a company until some financial head-bobber criticizes your pick?This book is little more than a cleverly disguised advertisement to get you to subscribe to their newsletters.Even on their site they provide no information on or how their million dollar portfolio is doing - none!



The book cover says it will teach you "how to build and grow a panic-proof investment portfolio." On that point it fails, miserably.

Posted on August 19, 2011

Delcie Raggs says...

If you apply this approach consistently and follow it for the next several decades, you will do well. If you follow your own ideas, I doubt if your results after tax will come close to what you could have earned by applying these methods.



One of the guilty little secrets about Wall Street is that the average investor does poorly, selling when stocks are down and buying when they are up, trading too often, piling up extra expenses for taxes and brokerage commissions. Why? People want to get rich quick. It's possible, but you are more likely to get rich slowly. This book teaches you how to do the latter by taking advantage of compounded returns.



David and Tom Gardner have provided a solid resource for those who are new to investing and want to take advantage of long-term trends and the odds to build a portfolio that will outperform inflation and the market averages. At a time like this when stocks have cratered and many bonds have buckled, many people will be reluctant to invest in anything other than treasury securities. Yet the best opportunities to invest usually come when things look quite bleak.



The book assumes that you've never bought a stock before. If that's you, I'm sure you will be able to pick a better stock than my first broker picked out for me (which promptly fell 95 percent in value).



From there, you'll learn about the benefits of buying stocks that grow and pay generous dividends (more than half of long-term gains from stocks come in dividend payments).



Next, the Gardners explain about buying high-quality, large companies inexpensively (at a discount, the Warren Buffett approach).



After that, you'll learn about why small-cap stocks should always outperform larger cap ones and how to pick the right ones.



The next section helps you spot companies that are breaking the mold with new business models that can give them extraordinary success over a short period of time (as Google did in the 21st century).



The Gardners next look at international investing and help you understand the various ways that you can pick successful stocks that will benefit from selling into locations where growth and profits will be high.



In the CAPS section, they explain about their online resource for assessing individual securities as a way for you to check your thinking.

It's an example of crowd wisdom.



Finally, you are shown how to assemble a portfolio using these various approaches . . . adjusted for your age, needs, and risk tolerances.



The book also gives you guidance on how to pick mutual funds in the appendix if you decide you don't want to be a stock picker.



The book has an excellent balance of summarizing the best academic research and outstanding books while providing simple "how to" directions complemented by examples that are completely developed enough to help you understand the analysis and thinking process that are being recommended.



I have only a few reservations about the book that kept me from grading it at five stars:



1. The book assumes that the investor is paying taxes on gains when incurred. If you are investing in a tax-deferred account (such as an IRA or 401k, the answers are a little different from what is described here).



2. The book assumes that an investor who reads this book wants to try to be a stock picker. Most people would be well advised not to be stock pickers. The joys of putting together a portfolio of index funds should have been explained in detail for those people.



3. The section on risk takers and rule breakers wasn't strong enough to teach someone what to look for. That surprised me given that the Gardners have published a book in the past on that very subject.



As a complement for this book, I suggest you also read John Bogle's Common Sense on Mutual Funds: New Imperatives for the Intelligent Investor and Jeremy Siegel's Stocks for the Long Run, 4th Edition: The Definitive Guide to Financial Market Returns And Long Term Investment Strategies.



Good luck!

Posted on August 19, 2011

Yuonne Mcgeough says...

This book is an absolute waste of time and money.



I've been reading the Motley Fool for a long time. I have a lot of their early books, and I spend a lot of time on their website. Their early stuff was great: Informative and educational, with the aim of turning the ordinary person into an intelligent investor. This book neglects all that. It's a novel-length advertisement for their various newsletters, without a hint of applicable information beyond vague generalities. It is a huge disappointment. I think the Fool has gotten too big for its britches, and succumbed to what Peter Lynch calls "diworseification".



Save your money and pass on this one.

Posted on August 21, 2011

Collene Lenke says...

As I read the book I kept thinking, "what's new?" There's a note about the financial collapse of 2008, attributed in part to over-leveraging and greed. They warn against excessive leverage but the key message is to stick to your knitting, which for the Gardner's is stock picking. In that regard, the book is a good read.



The Motley Fool Million Dollar Portfolio walks readers through an excellent method for picking your first stock, using a number of screens. It emphasizes the value of dividends, pointing out that between 1972 and 2006 S&P stocks not paying a dividend returned investors and average of 4.1% per year but dividend payers returned over 10% per year.



They cover value investing and how to pick stocks that are undervalued. "Outside of a few special situations like mergers and acquisitions or spin-outs, value investments only pay off if the company improves operations or increases sales." No, I don't think so. Value investments pay off because the market comes to properly value stocks.Investors can sit passively and wait for that to happen, and sometimes it does, or they can get active. The Gardner's never hint at that option.



Yes, the book does a good job of pointing out that returns on small-cap value stocks thrash those of small-cap growth stocks; small-cap stocks do better than large-caps; international stocks do better, on average, than domestic stocks; and so on.



Follow the rules and your picks should be better than average. Of course, the most fun is the chapter on "Risk Takers and Rule Breakers," which identifies some of the typical characteristics of emerging growth companies. Who wouldn't rather get wealthy by breaking the rules, rather than following them?



Sure, everyone wants to identify the next high-flyer, although I don't think they actually provide enough here to ensure good picks of these potential companies.The Gardener's offer mostly solid advice and put more emphasis on sustainability and patience than most investment books. That gives them 3 stars, maybe even 3 1/2.



However, I'm afraid readers will join the 94.5% of retail investors who aren't voting in corporate elections under the new e-proxy rules. The Gardner's don't point to any role for shareowners in governing corporations. There's nothing on how to unlock value that is being hampered by an ineffective board or greedy CEO. I'd like to see their next book take readers beyond picking to responsible ownership and activism. You don't have to wait until you have a million dollar portfolio before you make the switch from stockholder to stockowner.

Posted on August 21, 2011

Elissa Caira says...

The Gardner brothers publish an investment newsletter.That is their primary business.This book is a primer for the neophyte investor.This book does a good job of walking the beginner through the thought process that the Gardner's believe will lead to financial success in the stock market.



Here's the problem.If you track (and calculate for yourself)the Gardners' claimed successes with their recommended monthly stock picks as published in their newsletter, you do not achieve the same stellar results they often claim.I subscribed to their newsletter for many years, followed their investment advice precisely, and never achieved the same results they claimed.Not even close.



How was this mathematical slight of hand accomplished?I still have not quite figured that out.I have never seen their investment results tallied in great detail.I've only seen the final results.Not the calculations.Anyway, this book details in significant detail how the Gardners' investment decision process works.It is certainly interesting, as an academic exercise, to see how their thoughts are generated.As far as laying your money down on their recommendations...I think there are many better advisors out there who will help you achievebetter results.

Posted on August 22, 2011

Pat Hearnsberger says...

This is a very timely book considering that we are in the recession. The book talks about how Warren Buffett was sitting on a lot of cash in 2005, 2006, and 2007. When the stock market collapsed, he started putting the money to work. Investors should also put their money to work now because opportunities are abundant. As everyone else is panicking and selling their holdings from their retirement accounts, the number of favorably priced stocks is unbelievably high.



Chapter 1 states that Americans make three primary investment mistakes:



1)Never saving or investing in anything

2)Waiting too long to start

3)Picking the wrong stocks



This book teaches investors how to pick stocks. It shows what criteria Warren Buffett uses for Berkshire Hathaway to pick his investments. I liked how the authors used different examples of companies to showcase their points. It is really nice to read their analysis on particular companies, especially when I was personally analyzing some of the same companies for my own portfolio. I also appreciate that the books lists not only successful picks, but also some losers. For example, the authors say that they wish they never purchased Entercom. Their mistake was overestimating the company's competitive position. This is an excellent book for beginning and intermediate investors.



- Mariusz Skonieczny, author of Why Are We So Clueless about the Stock Market? Learn how to invest your money, how to pick stocks, and how to make money in the stock market

Posted on August 22, 2011