In Focus

Forever A Foolish Chick

I just got back from Germany and realized I had another article to write. I'm still trying to figure out what day it is and what country I am in, so bear with me in today's Chick's Eye View. But, if you want to peek at my Bridget Jones' recount of the trip, I summarized it on our Chicks' Message Board.

Three years ago this month, I was reading yet another investment book in my quest to understand the stock market. This book, The Motley Fool Investment Workbook, was by far the best book I had ever read. I found myself wanting to read more from these two brothers, David and Tom Gardner. Lucky for me, they had a few more books and a website, www.fool.com. I went to the website and immediately emailed them, told them I had to meet with them, and would they like to go to the Stanley Cup playoff game featuring the Washington Capitals against the Detroit Red Wings. Two minutes later, Tom Gardner responded... he'd love to!!

Do you ever meet someone for the first time and just know you will be friends for life? Tom and I became friends immediately and from then on, I was the biggest fan of Fool.com. I am going to be a guest on their radio show this weekend, (one of my twelve dreams in life), so in today's Chick's Eye View I'd like to tell you a bit about them, their books, and their website. When in doubt (and you're suffering from jet lag), write about what you know. The Gardners, Fool.com, and their various ventures, I know.

Tom and David started out writing an investment newsletter from their garage that they would mail out to anyone who would read it (and some who wouldn't). This led to their becoming one of the first financial websites on the Internet. Soon after, AOL discovered them and helped them become huge. The web success spawned a book, The Motley Fool Investment Guide. The book details their beginning investment approach, a simple explanation of the stock market, and discussion of mutual funds, alongside some Shakespearean tales.

After this book came You Have More Than You Think. This book helps a person become debt free and get their financial "house" in order. It teaches about the financial services industry, and many other big decisions in life -- buying a car or home, sending your children to college, or retiring. (Personally, I think this book should have come first as these things should be in order before you invest in the stock market.)

Then came The Motley Fool Investment Workbook. This is my favorite. It restates everything from The Motley Fool Investment Guide and let's the readers walk through some examples with their own pencil. Our investment club read this book before we invested a penny.

After the Workbook, came Rule Breakers, Rule Makers. It is a detailed explanation of their two most widely followed investment philosophies. The Rule Breaker and the Rule Maker. The Chicks incorporated both of these philosophies (with a splash of Buffett and Lynch) to form our Chicks Dozen Philosophy.

Tbest part of Fooldom, though, is their website. Since there is so much at fool.com (and the fact that my eyes are beginning to droop), I'm only going to cover what I know. Their biggest area is their message boards. They have so many different folders that you can discuss everything from various industries such as the Internet, retail, biotechnology, and utilities to a specific company or stock.

If you become a member of Fool.com (free) you are able to track all of your investments up to the minute. I have been a member since that fateful day three years ago when the Red Wings defeated the Capitals to win the Cup, and have found no place better to track my investments. You can track more than one portfolio, such as your club's, your personal portfolio, and an "If I Had A Million Dollars" portfolio.

The other part of their site that I follow is their investment strategies. Here they have real portfolios with stock in companies that meet their different investment approaches. The three that I follow are the Drip Portfolio, The Rule Maker Portfolio and The Rule Breaker Portfolio. Here is what they're all about and how they've done to date:

DRIP PORTFOLIO
The Drip Portfolio invests monthly in leading companies using commission-free dividend reinvestment and direct stock plans. It is their low-risk investment philosophy. The Drip Portfolio owns Campbell Soup, Intel, Johnson & Johnson, Mellon Financial, and Pepsi. Overall the drip portfolio has returned 14.80% compared to the S&P 500's of 7.56%.

RULE MAKER PORTFOLIO
The Rule Maker Philosophy is Tom Gardner's baby. This portfolio invests in established, highly profitable, large-cap companies that dominate their industries. It is medium risk. They own American Express, Cisco, Intel, Johnson & Johnson, Coca-Cola, Microsoft, Pfizer, Nokia, Schering Plough, T. Rowe Price, and Yahoo. Overall the Rule Maker portfolio has returned an annualized rate of (- 19.12%) vs. S&P of 12.74%. Woops. But the portfolio is Long Term, we'll check back in a year. (Or maybe I'll find a new friend.)

RULE BREAKER PORTFOLIO
The Rule Breaker Portfolio is David Gardner's brainchild. The Rule Breaker invests in young companies that are creating or redefining emerging industries. High risk. They own Amgen, Amazon, AOL-TimeWarner, Applera, eBay, Human Genome Sciences, and Starbucks. Overall the Rule Breaker Portfolio has returned an annualized rate of 28.81% vs. S&P of 15.87%

One of the greatest things that came out of my friendship with Tom Gardner was that he encouraged me to write Chicks Laying Nest Eggs. The Chicks were a registered investment club over on their site until we branched out onto own web-nest. But each and every Chick will tell you the first place we go when looking for MORE information about a company we are researching is to Fool.com. There's no place like home, and right now, there's no place like the bed in mine.