I recently wrote about my Motley Fool One membership expiring and as a result I need to figure out not only what will become of this site but also what this will do to my own investing process.
To begin answering those questions I need to think back to why I initially signed up for Motley Fool One.
In 2013, I got what in hindsight was a very good deal. I paid $2,000 per year for 5 years which was a significant amount of money, but compared to the current rate of $4,6001 per year seems like a steal2.
At that point in time I had been a member of various Motley Fool premium services and had been investing on my own for many years using varying strategies with varying degrees of success. I had learned quite a lot from the Motley Fool over the years, and I had reached a point in my life where I wanted to focus more on investing. At that same time, Motley Fool launched their revamped version of their all inclusive premium service, including Tom Gardner’s Everlasting Portfolio. It seemed like a great opportunity to leverage the resources of the Motley Fool while fine-tuning my investing strategy. So I signed up.
At the same time, I launched this site as a way to bring some transparency to the Motley Fool services. As much as I appreciated what Motley Fool had done for me and countless others, it had it’s shortcomings, most glaringly it’s misleading marketing and lack of transparency on it’s real performance. So I figured this site could serve two purposes – not only did I see this as a way to help other amateur investors out there, but it also served as a way for me to focus my own attempt at figuring out how to maximize the value I received from Motley Fool. At the time, Motley Fool One was definitely worth it for me.
Five years later, the Motley Fool One has changed in many ways.
They’ve invested a lot in the site itself, modernizing the look and feel, and adding some more sophisticated tools for tracking and researching stocks. Philosophically, they’ve maintained much of their core as a purveyor of various flavors of buy and hold investing in their classic services, but they’ve also begun expanding by repackaging much of their content in ways that are both more sophisticated but also much less high touch. It’s a much more effective business model for them if they can pull it off, but provides less value to the average unsophisticated investor, which is the market they’ve typically targeted.
So is Motley Fool One worth it now?
To answer this question, the good news is that I can turn to some of my own coverage. If I look at one article titled “Is Motley Fool One Worth It?” and my follow up “1 Year Review” I cited these main considerations:
- Cost / Portfolio Size
- Time available to allocate to spend on the service
And these primary selling points:
- VIP membership within the community including invitations to member events
- Access to all their premium services, including any new ones they develop in the future.
- Access to Tom Gardner’s Everlasting Portfolio
Taking these somewhat out of order, in the five years I’ve been a member I have never attended a single member event. But I knew that I likely never would, even at the time I signed up, so it was never a real selling point for me.
Regarding access to the Everlasting Portfolio, I have never purchased a single recommendation from the EP, and I rarely even read their content. Whereas the original philosophy of the Everlasting Portfolio was appealing to me, they’ve since started offering option trade suggestions and most recently, a short selling component. At this point it begins to feel gimmicky and unfocused and if you’re looking for options trades and shorting, they’ve already got a service that does those things better, in an integrated fashion, called Motley Fool Pro.
Access to all their services. This always was the main attraction for me. Being able to see every single stock recommendation and read all the analysis was key to my investing education and development. But having analyzed the various services in depth, this aspect has become less valuable to me. First, there are a number of services that I have come to realize don’t provide any real investing advantage and/or don’t fit into my investing strategy. Their track records tend to be spotty, relying on a handful of mega successful stocks to inflate their returns. While that in itself is not necessarily a bad thing as most portfolios are driven by the success of a minority of investments (the 80/20 rule of investing), most of the mega-winners overlap across services and therefore make the remaining picks for those services even less relevant. As a result I have come to ignore a number of services entirely.
As it relates to the new services they’ve rolled out in recent years (Discovery, Total Income, Explorer, etc.), these services are generally just repackaging existing content without much value add beyond that. In the case of Discovery portfolios, while these do offer new picks and are of some interest to me, the coverage they provide is extremely limited and therefore of limited value.
Availability of time. As mentioned previously, I am spending less time on investing, and the amount of content that is part of Motley Fool One, which was always difficult to manage, has become even more so with the expansion of services. From the point of view of this website, the expansion of services is also challenging – how to provide quality and timely analysis across all these services?
So where are the bright spots? There are a few services that I still think provide real value. A couple of the portfolios they run have been successful, and follow a solid investing process. Some of the advisors are top notch and the educational value from their community forums is still really high. And ultimately, having access to a staff of research analysts vetting and making me aware of investing opportunities, even if I ultimately ignore them, is incredibly useful, especially as I look to spend less of my time on investing.
So all of this brings us to the first consideration: the cost of Motley Fool One. With the price of Motley Fool One now up 130%, is it’s value to me up at least the same? Based on all of the above, it’s fairly clear that the answer is no.
So if Motley Fool One is not right for me anymore, which, if any, of the Motley Fool services are right for me, and what is the future of this site?
More to come in the following weeks.