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Motley Fool Advisor returns?
Old 07-29-2021, 11:58 AM   #1
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Motley Fool Advisor returns?

I clicked on a link that took me to an article on Motley Fool just a few minutes ago, and in the margin I saw an ad for something called the Motley Fool Stock Advisor. This is what they are claiming:

Motley Fool Advisor: Up 593%
S&P 500: Up 136%

In the small print, they imply that this is over the period Feb 2002 - July 2021. Yet, a quick back-test using Portfolio Visualizer shows that the S&P has more than quintupled (actually about 5.5x) since Feb 2002, which means it has grown by 450%. But even discounting that, it appears that they are claiming that their Advisor has been roughly 4.3x (i.e., 593 divided by 136) as profitable for investors since Feb 2002. Some snake oil, anyone?

Now here's the real kicker. They show a chart comparing the "time-weighted return" of the Advisor vs. the S&P 500 for a $10k starting investment. The growth of the S&P is fairly accurately shown as going from $10k to around $50k. But the Advisor is shown as going from $10k to over $325k! That's a 3,150% increase, equivalent to roughly 20% compound annual growth!! Over that period, the S&P 500 achieved "only" a 9.2% CAG.

I'm not sure what my question is here, other than maybe: Is there any (realistic) way this could be true, and if not, how can they get away with such blatantly misleading—or downright false—advertising? I mean, it's one thing to post an ad about, say, the metaphysical healing powers of crystals (hard to prove or disprove), but it's another whole level of deception to claim you have a stock advisor service that has outperformed the S&P by such a large margin for two whole decades!
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Old 07-29-2021, 12:03 PM   #2
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I saw one of their commercials the other day and they also made a similar claim. But hey...it's *only* $99/year....what a deal!

Apparently, they have 3 commercials running currently.

https://www.ispot.tv/brands/56u/the-motley-fool
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Old 07-29-2021, 02:07 PM   #3
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The MF numbers include some 10x plus like Amazon, Chipotle, Tesla, Apple, Paypal, and some others that really boosted the results if you get in early before the stock really takes off. That is my issue, have they gotten in before any recommendations so it is a self fulfilling result at first?
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Old 07-29-2021, 03:29 PM   #4
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Quote:
Originally Posted by ExFlyBoy5 View Post
I saw one of their commercials the other day and they also made a similar claim. But hey...it's *only* $99/year....what a deal!

Apparently, they have 3 commercials running currently.

https://www.ispot.tv/brands/56u/the-motley-fool
I think $99 is the introductory price only. Renewals are $199/year, although, of course, you could just keep signing up with a different email address to keep getting the intro price.

The thing is, if their claims are true—even remotely—it would be totally worth a couple hundred bucks a year... much more, even! But are they?? I highly doubt it.
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Old 07-29-2021, 03:32 PM   #5
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Originally Posted by 38Chevy454 View Post
The MF numbers include some 10x plus like Amazon, Chipotle, Tesla, Apple, Paypal, and some others that really boosted the results if you get in early before the stock really takes off. That is my issue, have they gotten in before any recommendations so it is a self fulfilling result at first?
How do you know which individual stocks are in their portfolio? Do they make these details public? It would be interesting to see a historical record of their recommendations, to verify they aren't playing games with the growth numbers. Or, more likely, to see how they're playing games with the numbers.
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Old 07-29-2021, 04:25 PM   #6
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I remember way back when they were all about index funds. I still have all the info from their website I printed out. I guess they figured out like others that you can't make a living off of pushing the same old great advise...Now it's who wants to settle for market returns when we can show you how to beat them... LOL..if their so good at it why are they telling us..they should be filthy rich and retired.
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Old 07-29-2021, 05:18 PM   #7
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Quote:
Originally Posted by Sojourner View Post
S&P 500: Up 136%

In the small print, they imply that this is over the period Feb 2002 - July 2021. Yet, a quick back-test using Portfolio Visualizer shows that the S&P has more than quintupled (actually about 5.5x) since Feb 2002, which means it has grown by 450%. ...

Now here's the real kicker. They show a chart comparing the "time-weighted return" of the Advisor vs. the S&P 500 for a $10k starting investment. The growth of the S&P is fairly accurately shown as going from $10k to around $50k.!
I'm really interested in how they figure 136% for S&P over that time. They could use all sorts of shenanigans for their own fund, but the S&P 500 is public knowledge, and that number doesn't make sense (even if you use NAV instead of total return, and they should be using total return).

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Old 07-29-2021, 07:56 PM   #8
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I've always felt a certain percentage of stock investing - is WWF wrestling, fake showmanship.

When I see stuff ike the "+593%" ...or even analysts who never ran a lemonade stand saying "Strong buy!" I just wonder.....heck, if I knew all of that would I be out telling people to buy...or would I quietly buy all I possibly can for myself? Probably the latter.

But then - many times when I look back at articles in Forbes, Fortune, Money, Barrons, whatever -- many times the 'calls' seem to be right.

So I get a bit flummoxed.
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Old 07-29-2021, 08:36 PM   #9
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Originally Posted by Sojourner View Post
I think $99 is the introductory price only. Renewals are $199/year, although, of course, you could just keep signing up with a different email address to keep getting the intro price.

The thing is, if their claims are true—even remotely—it would be totally worth a couple hundred bucks a year... much more, even! But are they?? I highly doubt it.
If you look at one of their ads where you have to enter your email you will eventually get a deal for $49 a year. I believe renewals are the same.
I believe their returns are true, but you'd have to invest in every stock they recommend, not easy. They have ridiculously big gains on things like Amazon. I got into Netflix at $34 because of MF, You can see how that did for me. Cintas is up 1600% for me since 2009 another MF pick. MA is another big gainer. They certainly have their hits(and misses).
I hadn't subscribed in maybe 6-7 years or more but did for the $49 this year just for fun. I bought some very minor positions in some of their new picks, but I don't really have any free money to invest.
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Old 07-29-2021, 08:54 PM   #10
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I'm not going to name the stocks but just a quick search showed these big winners through the years:
2010-1944% 1053%
2011- 1374%
2012- 10,059% 859%
2013- 1575%
2014- 959%
2015- 618%
2016- 4658% 1620%
2017- 1244% 469% 475%
2018- 1113% 758%

And lots more in the 400-600% gain range, and I didn't look through the whole list.
I don't know how they figure their returns but I did notice they sometimes recommend a stock more than once. So they recommended Netflix really early and then rec'd it again a short time later One rec shows a gain of 15,000% and the other 13,000% so that could be a way they boost returns?
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