The Motley Fool is a private financial and
investing advice company based in
Alexandria, Virginia
Alexandria is an independent city in the northern region of the Commonwealth of Virginia, United States. It lies on the western bank of the Potomac River approximately south of downtown Washington, D.C.
In 2020, the population was 159,467. ...
. It was founded in July 1993 by co-chairmen and brothers
David Gardner and
Tom Gardner
Tom Gardner (born April 16, 1968) is an American entrepreneur. He is one of the three founders of The Motley Fool. He is currently the company's CEO.
Gardner is the author of ''The Motley Fool Hidden Gems'' newsletter, which aims to find the ...
, and Erik Rydholm, who has since left the company. The company employs over 300 people worldwide.
Company name
The name “Motley Fool” is taken from Shakespeare’s comedy ''
As You Like It''. It references the one characterthe court jesterwho could speak the truth to the Duke without having his head lopped off.
History
Early years
In 1994, The Motley Fool published a series of statements online promoting a nonexistent sewage-disposal company. The messages, which were an April Fool's joke designed to teach a lesson about
penny stock
Penny stocks are common shares of small public companies that trade for less than one dollar per share.
The U.S. Securities and Exchange Commission (SEC) uses the term "Penny stock" to refer to a security, a financial instrument which represents ...
investing, garnered widespread attention, including an article in ''
The Wall Street Journal
''The Wall Street Journal'' is an American business-focused, international daily newspaper based in New York City, with international editions also available in Chinese and Japanese. The ''Journal'', along with its Asian editions, is published ...
''. In August that year, the Gardners parlayed their one-year-old investment newsletter into a content partnership with
America Online
AOL (stylized as Aol., formerly a company known as AOL Inc. and originally known as America Online) is an American web portal and online service provider based in New York City. It is a brand marketed by the current incarnation of Yahoo (2017 ...
(AOL). In December, they were profiled in the "Talk of the Town" section of the ''
New Yorker''.
In 1996, David and Tom Gardner published ''The Motley Fool Investment Guide'', which ranked on bestseller lists for ''
The New York Times
''The New York Times'' (''the Times'', ''NYT'', or the Gray Lady) is a daily newspaper based in New York City with a worldwide readership reported in 2020 to comprise a declining 840,000 paid print subscribers, and a growing 6 million paid ...
'' and ''
Bloomberg Businessweek
''Bloomberg Businessweek'', previously known as ''BusinessWeek'', is an American weekly business magazine published fifty times a year. Since 2009, the magazine is owned by New York City-based Bloomberg L.P. The magazine debuted in New York City ...
''. The book was controversial; ''
Bloomberg Bloomberg may refer to:
People
* Daniel J. Bloomberg (1905–1984), audio engineer
* Georgina Bloomberg (born 1983), professional equestrian
* Michael Bloomberg (born 1942), American businessman and founder of Bloomberg L.P.; politician and ...
'' wrote about The Motley Fool's "Fanatical following", while a
PBS ''
Frontline'' episode described the company as made up of "20-somethings" giving "so-called advice".
In 1997, the Motley Fool's online presence moved from AOL to its own domain, Fool.com, where it continued to provide investment advice under an advertising-based revenue model.
"Foolish Four" and dot-com bust
In the late 1990s, the Motley Fool publicized their "Foolish Four" method of
Systematic trading, adapted from the
Dogs of the Dow method for selecting stocks from the
Dow Jones Industrial Average
The Dow Jones Industrial Average (DJIA), Dow Jones, or simply the Dow (), is a stock market index of 30 prominent companies listed on stock exchanges in the United States.
The DJIA is one of the oldest and most commonly followed equity indexe ...
based on high
dividend yield
The dividend yield or dividend–price ratio of a share is the dividend per share, divided by the price per share. It is also a company's total annual dividend payments divided by its market capitalization, assuming the number of shares is constant ...
. They published a book on the topic in 1999. Journalist
Jason Zweig
Jason Zweig is an American financial journalist. He has been a columnist for ''The Wall Street Journal'' since 2008.
Biography
Zweig received his B.A. from Columbia University in 1982. He also studied Middle Eastern history and culture at the ...
criticized the Foolish Four method in 1999. Zweig describes selecting high-dividend yield stocks as a "sensible" strategy, at least on a preliminary level, as such stocks tend to be relatively inexpensive compared to other stocks using various
valuation methods. However, Zweig said the Motley Fool staff made outlandish claims such as the ability to "crush
mutual funds
nonly 15 minutes a year", used needlessly complicated mathematical formulas and he questioned the method's effectiveness. In 2000, Motley Fool writer Ann Coleman admitted that the Foolish Four method "turned out to be not nearly as wonderful a strategy as we thought".
During the
dot-com bubble and market collapse of 2001, the Motley Fool company removed 80% of its staff in three rounds of layoffs. It also closed its operations in Germany and Japan, which have since been re-established.
Expansion
In April 2002, The Motley Fool shifted to a
subscription-based business model with the launch of its first subscription service for investment advice. The company launched its Stock Advisor program, offering subscribers monthly stock picks and premium investment education.
The company also established free and subscription-based businesses in several countries. As of 2019, The Motley Fool has operations in the United Kingdom, Australia, Canada, Germany, and Japan. In October 2019, the company announced that it was shutting down operations in Singapore. A year later, in October 2020, the company announced that it was also shutting down operations in Hong Kong.
In August 2018, the company launched a personal-finance sub-brand called The Ascent to provide personal finance product reviews and free educational resources.
In September 2019, the Motley Fool launched two more sub-brands. Millionacres provides subscription-based
real estate investing advice and real estate resources.
On September 17, 2019, the Motley Fool launched its app, Investor Island. Investor Island is a real-time strategy board game based on investing. Players compete online to destroy each other's bases and gain a monopoly. Players collect stocks that reflect actual market data and give players money based on historical actions in the stock market. The Motley Fools claims that "everyone might just learn a little about the power of investing in the stock market" after playing their game. Investor Island is available on the iOS Appstore.
Legislative efforts
Representatives of The Motley Fool have testified before Congress against mutual fund fees in support of fair financial disclosure on the
Enron scandal and the
IPO process.
In 1999, the
Securities and Exchange Commission
The U.S. Securities and Exchange Commission (SEC) is an independent agency of the United States federal government, created in the aftermath of the Wall Street Crash of 1929. The primary purpose of the SEC is to enforce the law against mark ...
proposed
, which would require companies to simultaneously give vital information to Wall Street analysts and the public. In December 1999, Motley Fool author Bill Barker wrote an article telling readers to post comments on the SEC's website. The regulation passed, and in the July 2, 2001, edition of ''
The Wall Street Journal
''The Wall Street Journal'' is an American business-focused, international daily newspaper based in New York City, with international editions also available in Chinese and Japanese. The ''Journal'', along with its Asian editions, is published ...
'', former SEC chairman
Arthur Levitt is quoted saying, "Two-thirds of our letters came from Fools. Without them, Reg FD would not have happened".
See also
*
Investopedia
*
Seeking Alpha
*''
Totalise plc v Motley Fool Ltd
''Totalise plc v Motley Fool Ltd'' (2001) was the first case of Internet libel in the UK. Totalise (Totalise became part of Madasafish in 2006)[Wall Street Survivor
Wall Street Survivor is an educational website that teaches the basics of finances. Launched in 2005, it uses gamification to teach concepts of the stock market, investing, and general financial planning. The website also provides articles, video ...](_blank ...<br></span></div>''
*<div class=)
References
External links
*
{{DEFAULTSORT:Motley Fool, The
1993 establishments in Virginia
American companies established in 1993
Companies based in Alexandria, Virginia
Economics websites
Finance websites
Financial services companies established in 1993
Internet forums
Internet properties established in 1993
Investment in the United States
Webby Award winners