The Motley Fool

Last updated
Motley Fool
Type of businessPrivate
Type of site
Financial advisory services
FoundedJuly 1993;30 years ago (1993-07)
Headquarters
Alexandria, Virginia
,
U.S.
Area servedUnited States, United Kingdom, Australia, Canada, Germany, Japan, Hong Kong
OwnerThe Motley Fool, LLC
Founder(s)
URL www.fool.com

The Motley Fool is a private financial and investing advice company based in Alexandria, Virginia. It was founded in July 1993 by co-chairmen and brothers David Gardner and Tom Gardner, and Todd Etter and Erik Rydholm. [1] [2] [3] The company employs over 300 people worldwide. [4]

Contents

Company name

The name “Motley Fool” is taken from Shakespeare's comedy As You Like It . It references the one character –the court jester –who could speak the truth to the Duke without having his head lopped off. [5]

History

Early years

In 1994, The Motley Fool published a series of statements online promoting a nonexistent sewage-disposal company. [6] The messages, which were an April Fool's joke designed to teach a lesson about penny stock investing, garnered widespread attention, including an article in The Wall Street Journal . [7] In August that year, the Gardners parlayed their one-year-old investment newsletter into a content partnership with America Online (AOL). [8] In December, they were profiled in the "Talk of the Town" section of the New Yorker . [9]

In 1996, David and Tom Gardner published The Motley Fool Investment Guide, which ranked on bestseller lists for The New York Times and Bloomberg Businessweek . [10] The book was controversial; Bloomberg wrote about The Motley Fool's "Fanatical following", [11] while a PBS Frontline episode described the company as made up of "20-somethings" giving "so-called advice". [12]

In 1997, the Motley Fool's online presence moved from AOL to its own domain, Fool.com, where it continued to provide investment advice under an advertising-based revenue model. [13]

"Foolish Four" and dot-com bust

In the late 1990s, the Motley Fool publicized their "Foolish Four" method of Systematic trading, adapted from the Dogs of the Dow method for selecting stocks from the Dow Jones Industrial Average based on high dividend yield. They published a book on the topic in 1999. [14] Journalist Jason Zweig criticized the Foolish Four method in 1999. [15] Zweig describes selecting high-dividend yield stocks as a "sensible" strategy, at least on a preliminary level, as such stocks tend to be relatively inexpensive compared to other stocks using various valuation methods. However, Zweig said the Motley Fool staff made outlandish claims such as the ability to "crush mutual funds [in] only 15 minutes a year", used needlessly complicated mathematical formulas and he questioned the method's effectiveness. [16] In 2000, Motley Fool writer Ann Coleman admitted that the Foolish Four method "turned out to be not nearly as wonderful a strategy as we thought". [17] [ better source needed ]

During the dot-com bubble and market collapse of 2001, the Motley Fool company removed 80% of its staff in three rounds of layoffs. [18]

Expansion

In February 2002, The Motley Fool shifted to a subscription-based business model [19] The company launched its Stock Advisor program, offering subscribers monthly stock picks and premium investment education. [20]

The company also established free and subscription-based businesses in several countries. As of 2023, The Motley Fool has operations in the United Kingdom, Australia, and Canada. [21] In October 2019, the company announced that it was shutting down operations in Singapore. [22] A year later, in October 2020, the company announced that it was also shutting down operations in Hong Kong. [23]

In August 2018, the company launched a personal-finance sub-brand called The Ascent [24] to provide personal finance product reviews and free educational resources.

In September 2019, the Motley Fool launched two more sub-brands. Millionacres provides subscription-based real estate investing advice and real estate resources. [25]

On September 17, 2019, the Motley Fool launched its app, Investor Island. [26] Investor Island is a real-time strategy board game based on investing. Players compete online to destroy each other's bases and gain a monopoly. Players collect stocks that reflect actual market data and give players money based on historical actions in the stock market. The Motley Fools claims that "everyone might just learn a little about the power of investing in the stock market" after playing their game. Investor Island is available on the iOS Appstore.

Legislative efforts

Representatives of The Motley Fool have testified before Congress against mutual fund fees, [27] in support of fair financial disclosure, [28] on the Enron scandal, [29] and the IPO process. [30]

In 1999, the Securities and Exchange Commission proposed Regulation Fair Disclosure, which would require companies to simultaneously give vital information to Wall Street analysts and the public. In December 1999, Motley Fool author Bill Barker wrote an article telling readers to post comments on the SEC's website. [31] The regulation passed, and in the July 2, 2001, edition of The Wall Street Journal , former SEC chairman Arthur Levitt is quoted saying, "Two-thirds of our letters came from Fools. Without them, Reg FD would not have happened". [13]

See also

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Temper of the Times Investor Services, Inc. is a specialized broker/dealer that enroll potential investors in Dividend Reinvestment Plans by buying initial shares and transferring ownership to the investor. First incorporated in 1981 as Temper of the Times Communications, Inc., it was the publishing company for the financial newsletter The Moneypaper. In the May 1986 issue of The Moneypaper, Temper first printed an order form for subscribers to use to become enrolled in company DRP programs. In 1996, Temper split into two separate companies: The Moneypaper, Inc. became the publishing company, and Temper of the Times Communications, Inc. was renamed Temper of the Times Investor Services, Inc. and was registered with the Financial Industry Regulatory Authority (FINRA) as a broker/dealer. To date, it is the only brokerage whose only service is to facilitate enrollment in Dividend Reinvestment Plans, and has been used by The Motley Fool in its "Starting Direct Investment Plans" article, where it was referred to as "the most reasonable service that we know of for enrolling in DRPs." Forbes.com wrote concerning Temper:

If you're still convinced that DRIPs are for you, here's more:

Most plans require that new members already own stock in the company, often as little as one share. Buy this share through a broker, but be sure it is registered in your own name, not in a street name. The broker will probably charge a fee for the paper certificate.

You can buy into a DRIP through the company's plan administrator...or through a service like Temper of the Times Communications, a... company that charges a flat (fee) to set up a DRIP account with most companies' programs. Temper enrolls you in the program, charging a commission of between 5 cents and 50 cents a share to buy stock for your DRIP account. Depending on your circumstances, such a plan makes sense.

References

  1. ↑ "America is Leading the Global Economy Above And Beyond Its Pre-Pandemic Strength". www.nasdaq.com. Retrieved July 26, 2021.
  2. ↑ Morgan, Jacob (2012-03-16). "I Found a Chief Collaboration Officer and his name is Todd". Jacob Morgan | Best-Selling Author, Speaker, & Futurist | Leadership | Future of Work | Employee Experience. Retrieved 2023-04-08.
  3. ↑ "Motley Fool's Todd Etter Speaks At Baylor". www.chattanoogan.com. 2001-10-03. Retrieved 2023-04-08.
  4. ↑ "The Motley Fool's Competitors, Revenue, Number of Employees, Funding and Acquisitions". Owler. January 1, 2020. Archived from the original on February 3, 2020. Retrieved February 3, 2020.
  5. ↑ O'Malley, Michael (December 12, 2019). "What the 'Best Companies to Work For' Do Differently". Harvard Business Review. ISSN   0017-8012 . Retrieved February 5, 2020.
  6. ↑ Gomes, Lee (May 24, 1994). "On-line Ripoffs". Chicago Tribune. Retrieved January 26, 2020.
  7. ↑ Doward, Jamie (April 29, 2000). "If the jester's cap fits ..." The Guardian .
  8. ↑ Kornbluth, Jesse (December 24, 1995). "Who Needs America Online?". The New York Times Magazine .
  9. ↑ Kornbluth, Jesse (December 11, 1994). "What a (Motley) Fool Believes". The New Yorker .
  10. ↑ "The Motley Fool Investment Guide". Goodreads. Retrieved October 1, 2018.
  11. ↑ Foust, Dean (July 15, 1996). "Getting The Net To Help Build Your Portfolio". Bloomberg News .
  12. ↑ "Tapes & Transcripts | 'Betting On The Market'". Frontline. PBS. Retrieved November 8, 2019.
  13. 1 2 Dugan, Ianthe Jeanne (July 2, 2001). "Followers of the Motley Fool Are Suffering, and Not Gladly". Wall Street Journal. ISSN   0099-9660 . Retrieved February 5, 2020.
  14. ↑ Brian Bauer (1999). The Foolish Four: How to Crush Your Mutual Funds in 15 Minutes a Year. Motley Fool Publishing, ISBN 978-1892547019
  15. ↑ Zweig, Jason (June 24, 2015). "False Profits". JasonZweig.com. Retrieved October 1, 2018.
  16. ↑ "Investor Home - Dow 10, Foolish Four and other Dow Dividend Strategies". Investor Home. Retrieved October 1, 2018.
  17. ↑ "Fool.com: Fool Four Moves On [Foolish Four] December 29, 2000". August 16, 2013. Archived from the original on August 16, 2013. Retrieved October 1, 2018.
  18. ↑ "A Wake for the Motley Fools". Washington Post. February 10, 2001. ISSN   0190-8286 . Retrieved October 1, 2018.
  19. ↑ McCarthy, Ellen (January 31, 2002). "Motley Fool Goes From Free to Fee". The Washington Post . ISSN   0190-8286 . Retrieved November 8, 2019.
  20. ↑ MeMore, Money. "Motley Fool Stock Advisor Review". MeMoreMoney.
  21. ↑ "About The Motley Fool". The Motley Fool. Retrieved 2023-12-20.
  22. ↑ Tan, Claudia (October 10, 2019). "Motley Fool ceasing Singapore operations over regulatory issues". The Business Times. Retrieved November 8, 2019.
  23. ↑ "Motley Fool to close Hong Kong business due to political uncertainty". Reuters . October 7, 2020. Retrieved October 31, 2020.
  24. ↑ "The Motley Fool Is 25 This Year. Here's How They Changed the Way America Invests". Washingtonian. April 1, 2019. Retrieved November 8, 2019.
  25. ↑ "The Motley Fool rolls out a new company. Its focus? Real estate investing". Bizjournals.com. Retrieved November 8, 2019.
  26. ↑ "Investor Island by The Motley Fool". AppAdvice. Retrieved May 5, 2021.
  27. ↑ "Fool.com: Mutual Funds -- Costs -- Mr. Gardner Goes to Washington". zing.ncsl.nist.gov. Archived from the original on 2018-10-02. Retrieved October 1, 2018.
  28. ↑ "Testimony, Sept. 13 Hearing on Auditor Independence Proposal". U. S. Securities and Exchange Commission. Retrieved October 1, 2018.
  29. ↑ "Financial Collapse of Enron". C-SPAN.org. Retrieved October 1, 2018.
  30. ↑ "Initial Public Offering Process". C-SPAN.org. June 20, 2012. Retrieved October 1, 2018.
  31. ↑ Barker, Bill (March 21, 2000). "Fool.com: The SEC Needs Your Help (Special)". zing.ncsl.nist.gov. Retrieved October 1, 2018.[ dead link ]
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