fool.com (Motley Fool)

I was pointed in the direction of the Motley Fool website (www.fool.co.uk) a couple of years ago, after the other half stumbled across it in the firewall log at work – strange (possibly sad) but true. The Fool (TMF) is a financial and investment related website, aimed at ensuring that people get the most from their money. I would not be exaggerating – at least not much – if I said that TMF has changed my life and my financial outlook.
...US company originally, TMF was founded by brothers David and Tom Gardner. In 1997, the concept made its way across the Atlantic and TMF UK was born, set up by David Berger and Bruce Jackson (TMFGoogly). The TMF name, incidentally, comes from Shakespeare’s “As You Like It”.

The stated aim of TMF is to “educate, amuse and enrich”, to tell people the truth about finance and help them take control of their ... more

I was pointed in the direction of the Motley Fool website (www.fool.co.uk) a couple of years ago, after the other half stumbled across it in the firewall log at work – strange (possibly sad) but true. The Fool (TMF) is a financial and investment related website, aimed at ensuring that people get the most from their money. I would not be exaggerating – at least not much – if I said that TMF has changed my life and my financial outlook.

· History and Background

A US company originally, TMF was founded by brothers David and Tom Gardner. In 1997, the concept made its way across the Atlantic and TMF UK was born, set up by David Berger and Bruce Jackson (TMFGoogly). The TMF name, incidentally, comes from Shakespeare’s “As You Like It”.

The stated aim of TMF is to “educate, amuse and enrich”, to tell people the truth about finance and help them take control of their cash. Since the site is independent, it doesn’t recommend one company or product over another. However, I should point out that it does have affiliate links and the site advertises financial products.

TMF is free to use and serves millions of page views each month, to hundreds of thousands of site visitors. There are now over 400,000 registered users. TMF regularly appears on TV and radio (for example David Kuo, TMFDragon, appears on BBC London every day), staff write columns for newspapers and magazines, and provide content for other websites, such as Yahoo!.

This opinion will, almost exclusively, focus on the TMF UK site, since I have little or no experience of TMF US.

· Corporate Opinions

TMF UK believes that most people who want to invest in stocks and shares should:
a) First build up cash reserves of between 3 and 6 months of living expenses
b) Only invest money they can afford to lose, as investing in the stock market is inherently risky, and
c) Buy a tracker, preferably within an ISA (Individual Savings Account) if they haven’t already used up their annual allowance.

The basic reason for this is, they say, that the UK stock market between 1918 and 2002 averaged 11% growth. 82% (yes, that’s more than four out of five) active funds could not match the performance of the FTSE All Share index.

There are, however, plenty of people on TMF who disagree, and are usually more than happy to explain why!

· Registration

Registration is free for the UK site, which is supported by advertising revenue, but the US site is subscription based – 30-day free trials are available that give a read-only access to boards if you’re interested.

Registration is quick and easy, and I’ve never had any trouble with privacy or spam or similar. The site uses cookies, and you can choose whether you stay logged in at all times on your computer or whether you log out at the end of each session. At registration you can opt to receive various newsletters (you can change your choices later on). Once you give your email address, you are sent a message that contains a link to activate your account. Click on that link and hey presto, you’re a member.

· Site Content

TMF UK is absolutely packed with content, to the extent that more than 2 years after I joined, I still find new areas to visit.

There are guides to many finance related products or problems, with subjects ranging from finding an online broker to how to save, getting out of debt to spreadbetting (the former usually follows the latter!). The content of these guides is, in my experience, clear and well written, and usually offers links to other sites or sources of information on the topic. Most guides have a relevant discussion board associated with them, where users can post and “speak” to people interested in the same area.

Users can subscribe to regular emails that include links to articles written about a wide range of subjects on a daily, weekly or monthly basis. Each email is different, and many subscribe to more than one. I usually find at least two or three items of interest in the lunchtime email sent out on weekdays, anything from new financial products to how to budget or get a better deal.

· Discussion Boards

TMF has close to 250 discussion boards, not including boards that relate to specific individual shares, or those set up for investment clubs, and they receive over 2000 posts per day. Subjects range between on- and off-topic, and there’s usually something for everyone, from Value Investing or ISAs (and PEPs) to the Book Club or Recipes – Cooking boards. My award for the most bizarre board name goes to All Beards and Woolly Jumpers, a board about Real Ale.

There are boards to do with most financial products, and the individuals who post on them are for the most part very knowledgeable about their subject. There are a couple of debt counsellors and a professional debt collector who give advice on Dealing with Debt, lawyers who post on Legal Advice, a mortgage broker on the Mortgages board (none of whom are employed by TMF). Even where there aren’t specialists posting, there are people with lots of knowledge and experience willing to share that for the benefit of other posters. I have always found a strong feeling of community on the boards, and while it can be daunting making that first post, it’s easy to settle in.

Once you settle in and start to make friends, you may find that you want to keep an eye out for any posts made by a particular user. Fortunately, it’s easy – just click on the smiley face next to their name when you are reading one of their posts and you will find them on your “Favourite Fools” list. This is essentially the same as the Circle of Trust on Ciao and works in much the same way. Some users on TMF collect “luvvies” (people who list them as a Favourite Fool), and have no qualms about asking to be added to your list – especially on Land of Off Topic Posts (LoOTP), but it’s just a bit of fun.

There is no rating system for individual posts similar to Ciao’s, since it’s not a consumer opinion site. You do have the ability to recommend, or rec, a post however. If enough people agree and also recommend it, the post may appear on the “Best Of” board. Each user has a limit of 30 recs a day – most people never come close to using the full 30, but a minority believe that this isn’t enough.

Discussion boards can be read in threaded or unthreaded mode, and users can also choose when reading a post to look at the entire thread that it belongs to. It’s also possible to decide whether to display text in a serif or sans serif font (like Times New Roman vs Arial/Gill etc).

When writing posts, TMF supports bold, italics and pre-formatted text through the appropriate HTML tags, but not changing colours or underlining. Address of websites are (usually) picked up automatically and converted into links. Any other words underlined in a post are part of a new advertising scheme based on finance-related keywords (stock, ISA, bank, loan, account and so on).

The other type of post users have access to is a poll. This features a maximum of five options, and people can vote once in each poll but view the results at any time.

· Stars, Cups and Crowns

Many users have one or more icons following their usernames when they post. When you first start posting you will see “new” against your name – it usually hangs around for a month or so. Once you have made 50 posts you are awarded a little gold star, with extra little gold stars after 250 and 500 posts. Other milestones are reached at 1000 posts (Big Red Star), 5000 (Big Gold Star) and 20,000 (Big Funky Green Star).

Every year, on the anniversary of the date you registered with the Fool, you will receive a balloon icon next to your name in celebration. This has become known as Blune (or balloon) day.

Given time, any Fool can get stars, but it’s only a special few who are awarded a cup or a crown. Crowns are given to the 50 most recommended Fools. This is based on the rec-to-post average of their ten most recommended posts within the past 30 days. This crown should indicate users whose posts are regularly of a higher quality than average. In practice this isn’t always the case, as people “rec-tart” to bump up their average and tend to recommend their friends posts over others.

· The Community

TMF has a strong sense of community, stronger than other discussion board based websites I have visited. This may be because users are taking an interest (usually) in financial matters tends to indicate a more mature outlook. There are discussion boards dedicated to arranging Fool socials (London and Not London), something I consider a good indication of a web community.

Even so, TMF has many of the failings of other online communities. The major issue is usually that of misunderstanding – the written medium is not very good at communicating the tone or intent of a post, and what to one person is perfectly acceptable advice, to another can seem hurtful or even offensive.

Like most web communities, TMF is occasionally victim of trolls (people who deliberately try and stir up trouble) and spammers (usually people wanting to advertise their own product or website). Both are dealt with pretty swiftly, since all users have access to a “Report This Post” facility, which sends an alert to Fool HQ for it to be removed.

There are definite sub-communities within TMF, so for a new user it’s advisable to browse previous posts to get an idea of the tone and content – the *ahem* assertive style of Land of Serious Topics (LoST) would not work on Comfort Café (CC) for example.

· Other Areas

Other areas of TMF include Quotes and Data, My Portfolio, and My Fool.

Quotes and Data is basically a resource to find market data, compare brokers, get a broker or spreadbetting account, get free annual reports from companies or access news headlines about companies you have an interest in. There is also a link to the next area of interest, My Portfolio (well, not mine specifically, but you get the idea…).

My Portfolio allows users to set up a portfolio of shares (or more than one if you are so inclined) and track its performance. It can be either a virtual or paper portfolio or set up to track an actual account – for example I set a portfolio up to track my self-select ISA.

I initially found it quite fiddly to set up, and every time I edit the portfolio it takes a minute or two to work out how to achieve what I want. This could well be because I don’t use it frequently enough to be completely familiar with what it will do and how it works. There’s definitely scope for improvement in the interface, though it does what it claims.

You can choose which portfolio to have as your default view and which benchmark to measure its performance against (FTSE 100, FTSE All Share or TechMark). It works out the average cost of each share including dealing fees and stamp duty, and tracks performance based on this figure rather than the raw cost price. It shows the cost of your holdings, the total gain (or loss) in percentage terms and in hard cash, tracks annualised return and compares this to your chosen benchmark, as well as giving a simple return.

The only real niggle I have is that all prices are based on the mid-price of the share rather than its true buy or sell price. There is a daily view as well as a long-term view of your portfolio, but this is something I rarely use.

On the My Fool page, you can customise its appearance to suit you, at least to some extent. I don’t use My Fool nearly as much as some other Fools. It shows whether you have any unread posts on your favourite boards, gives an overview of your default portfolio, shows which newsletters you have subscribed to and gives latest headlines among other things.

You can detach the “My Boards”, “My Portfolio” and “My Links” elements and have them open in several windows rather than the main content area – some people prefer this, but I find it clutters up the address bar on my computer and prefer not to bother. But, whatever suits, and it’s good that users have a number of different ways of navigating the site.

· Other TMF Content

TMF in addition to publishing content on the web publishes content in the traditional dead-tree format, that is, books. The most recent of these is “A Girl’s Best Friend Is Her Money”, written by Jane Mack (TMFJane) and Jasmine Birtles. Others include:
· UK Investment Guide (3rd Edition)
· Tax Return Workbook
· Investment Workbook
· Guide to Online Investing
· The Old Fool’s Retirement Guide
· Make Your Child a Millionaire
· How To Invest When You Don’t Have Any Money
· Rule Breakers, Rule Makers

A recent innovation has seen the “Taking Control of Your Money” workshop aimed at women. This follows the success of “A Girl’s Best Friend Is Her Money” book, and has now been held three times.

· Other Information

Go to www.fool.co.uk to take a look around for yourself.

Since I signed up to the Fool, I have remortgaged to get a better deal, changed electricity and gas supplier, swapped my cash ISA provider to someone with a better rate, changed from a CAT-standard tracker ISA to a self-selected one (from comdirect), opened a better savings account paying more interest, and paid off all my debts except my student loan. More importantly, I’ve worked out taking these relatively simple steps mean that I am somewhere near £1500 better off a year, before including any investment performance. It’s absolutely true to say that TMF changed my life and my financial future.
 

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