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The Motley Fool

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Motley Fool
Type of businessPrivate
Type of site
Financial advisory services
FoundedJuly 1993; 31 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)
URLwww.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]

Company name

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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

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Early years

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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][14]

"Foolish Four" and dot-com bust

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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.[15] Journalist Jason Zweig criticized the Foolish Four method in 1999.[16] 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.[17] 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".[18][better source needed] In 1999, McQueen and Thorley wrote a light hearted paper that used the Foolish Four portfolio to illustrate the limitations of any trading strategy based on data mining historical returns data, especially one described in a best selling book.[19]

During the dot-com bubble and market collapse of 2001, the Motley Fool company removed 80% of its staff in three rounds of layoffs.[20]

Expansion

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In February 2002, The Motley Fool shifted to a subscription-based business model[21] The company launched its Stock Advisor program, offering subscribers monthly stock picks and premium investment education.[22]

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.[23] In October 2019, the company announced that it was shutting down operations in Singapore.[24] A year later, in October 2020, the company announced that it was also shutting down operations in Hong Kong.[25]

In August 2018, the company launched a personal-finance sub-brand called The Ascent[26] 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.[27]

On September 17, 2019, the Motley Fool launched its mobile game, Investor Island.[28] 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

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Representatives of The Motley Fool have testified before Congress against mutual fund fees,[29] in support of fair financial disclosure,[30] on the Enron scandal,[31] and the IPO process.[32]

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.[33] 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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References

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  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. ^ a b Dugan, Ianthe Jeanne (July 2, 2001). "Followers of the Motley Fool Are Suffering, and Not Gladly". The Wall Street Journal. ISSN 0099-9660. Retrieved February 5, 2020.
  14. ^ "The Motley Fool expands beyond AOL". Washington Business Journal. 1997. Archived from the original on July 30, 2004. Retrieved June 20, 2024.
  15. ^ Brian Bauer (1999). The Foolish Four: How to Crush Your Mutual Funds in 15 Minutes a Year. Motley Fool Publishing, ISBN 978-1892547019
  16. ^ Zweig, Jason (June 24, 2015). "False Profits". JasonZweig.com. Retrieved October 1, 2018.
  17. ^ "Investor Home - Dow 10, Foolish Four and other Dow Dividend Strategies". Investor Home. Retrieved October 1, 2018.
  18. ^ "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.
  19. ^ McQueen, Grant Richard; Thorley, Steven (February 1999). "Mining Fool's Gold". SSRN. doi:10.2139/ssrn.158409. Retrieved 16 October 2024.
  20. ^ "A Wake for the Motley Fools". Washington Post. February 10, 2001. ISSN 0190-8286. Retrieved October 1, 2018.
  21. ^ McCarthy, Ellen (January 31, 2002). "Motley Fool Goes From Free to Fee". The Washington Post. ISSN 0190-8286. Retrieved November 8, 2019.
  22. ^ MeMore, Money. "Motley Fool Stock Advisor Review". MeMoreMoney.
  23. ^ "About The Motley Fool". The Motley Fool. Retrieved 2023-12-20.
  24. ^ Tan, Claudia (October 10, 2019). "Motley Fool ceasing Singapore operations over regulatory issues". The Business Times. Retrieved November 8, 2019.
  25. ^ "Motley Fool to close Hong Kong business due to political uncertainty". Reuters. October 7, 2020. Retrieved October 31, 2020.
  26. ^ "The Motley Fool Is 25 This Year. Here's How They Changed the Way America Invests". Washingtonian. April 1, 2019. Retrieved November 8, 2019.
  27. ^ "The Motley Fool rolls out a new company. Its focus? Real estate investing". Bizjournals.com. Retrieved November 8, 2019.
  28. ^ "Investor Island by The Motley Fool". AppAdvice. Retrieved May 5, 2021.
  29. ^ "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.
  30. ^ "Testimony, Sept. 13 Hearing on Auditor Independence Proposal". U. S. Securities and Exchange Commission. Retrieved October 1, 2018.
  31. ^ "Financial Collapse of Enron". C-SPAN.org. Retrieved October 1, 2018.
  32. ^ "Initial Public Offering Process". C-SPAN.org. June 20, 2012. Retrieved October 1, 2018.
  33. ^ 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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