Motley Fool Hidden Gems made the announcement in their latest issue that they are changing their service from a portfolio-based service back to a recommendation service. The portfolio approach was started back in 2009, and prior to that it operated similarly to the other recommendation services with 2 stock picks per month. So although full details will be revealed in their next issue, this sounds like it will be a return to its idea-generation roots.
Reaction on the member boards is mixed, but most seem to be in favor of the change. The service started to lack focus over the last couple years, without clear direction on their recommendations, and a general lack of coverage on existing picks. Although I have not been following the service closely since I joined Motley Fool One, I have been casually reading the newsletters and updates, and I agree that their process of first declaring a stock as a “portfolio candidate” but then issuing a separate buy alert when they felt the price was good, is confusing and off-putting.
I have to give the Motley Fool credit for being willing to admit when something isn’t working and changing it (even if it took a couple years), but the Hidden Gems service really seems to have suffered from a clear vision and leadership over the years. Their performance has also been less than stellar, so of course that doesn’t help either. This change, if executed well, should really get this service back into the Motley Fool wheelhouse of identifying stocks that are under the radar with great upside potential over the long haul. It leaves the onus of portfolio management on the members, but Motley Fool portfolio services generally lag in performance relative to their idea-generation services anyway.
And from a marketing point of view, it makes sense to right the ship and re-prioritize Hidden Gems. The allure of finding undiscovered small cap stocks and hitting home runs with them attracts a lot of people (even if it’s for all the wrong reasons). But if new members of Hidden Gems can have a good and rewarding experience, they are likely to subscribe to the other Motley Fool subscriptions as well.
Let me know what you think about this change, especially if you are a current member of Hidden Gems.
And check out my performance stats by clicking on the Performance category at the right.