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The Motley Fool Million Dollar Portfolio: How to Build and Grow a Panic-Proof Investment Portfolio (Hardcover)


Review
"The best place online for talking with investors... amusing as well as educational." -- Barron's

"Their panache is a cover for a belief in the old-fashioned virtues of patience, simplicity, and prudence." -- U.S. News & World Report

"They’ve built up a large and much-deserved following." -- Washington Post

Product Description

In this long-anticipated, groundbreaking guide to building a portfolio, acclaimed stock pickers and Internet pioneers David and Tom Gardner lay bare the simple philosophy that they have used to help millions of grateful individual investors outfox the professionals on Wall Street.

The research, the stories, and the results that underpin this book stem from the revolutionary and wildly successful "Motley Fool Million Dollar Portfolio""—a one-of-a-kind Web experiment in which individual investors follow along as Motley Fool co-founder Tom Gardner invests and manages $1 million of The Motley Fool's own money.

In page after page of sound, sensible investment advice, readers are offered a rare glimpse into the inner workings of The Motley Fool machine—and offered a first-class education in building, growing, and defending an individual portfolio, one investment strategy at a time. From learning to think like an investor to finding a first stock, from dividend investing to blue-chip bargains to small-cap treasures, from international investing to community-based online tools that are revolutionizing stock selection and asset allocation, this book takes the reader through the essential strategies for building any portfolio—no matter how small its start or how big its ambitions.

Excellent and Understandable Overview of Investing Styles and Portfolio Asset Allocation, December 27, 2008
By Donald Mitchell "a Practical Optimist" (Boston)

If you apply this approach consistently and follow it for the next several decades, you will do well. If you follow your own ideas, I doubt if your results after tax will come close to what you could have earned by applying these methods.

One of the guilty little secrets about Wall Street is that the average investor does poorly, selling when stocks are down and buying when they are up, trading too often, piling up extra expenses for taxes and brokerage commissions. Why? People want to get rich quick. It's possible, but you are more likely to get rich slowly. This book teaches you how to do the latter by taking advantage of compounded returns.

David and Tom Gardner have provided a solid resource for those who are new to investing and want to take advantage of long-term trends and the odds to build a portfolio that will outperform inflation and the market averages. At a time like this when stocks have cratered and many bonds have buckled, many people will be reluctant to invest in anything other than treasury securities. Yet the best opportunities to invest usually come when things look quite bleak.

The book assumes that you've never bought a stock before. If that's you, I'm sure you will be able to pick a better stock than my first broker picked out for me (which promptly fell 95 percent in value).

From there, you'll learn about the benefits of buying stocks that grow and pay generous dividends (more than half of long-term gains from stocks come in dividend payments).

Next, the Gardners explain about buying high-quality, large companies inexpensively (at a discount, the Warren Buffett approach).

After that, you'll learn about why small-cap stocks should always outperform larger cap ones and how to pick the right ones.

The next section helps you spot companies that are breaking the mold with new business models that can give them extraordinary success over a short period of time (as Google did in the 21st century).

The Gardners next look at international investing and help you understand the various ways that you can pick successful stocks that will benefit from selling into locations where growth and profits will be high.

In the CAPS section, they explain about their online resource for assessing individual securities as a way for you to check your thinking.
It's an example of crowd wisdom.

Finally, you are shown how to assemble a portfolio using these various approaches . . . adjusted for your age, needs, and risk tolerances.

The book also gives you guidance on how to pick mutual funds in the appendix if you decide you don't want to be a stock picker.

The book has an excellent balance of summarizing the best academic research and outstanding books while providing simple "how to" directions complemented by examples that are completely developed enough to help you understand the analysis and thinking process that are being recommended.

I have only a few reservations about the book that kept me from grading it at five stars:

1. The book assumes that the investor is paying taxes on gains when incurred. If you are investing in a tax-deferred account (such as an IRA or 401k, the answers are a little different from what is described here).

2. The book assumes that an investor who reads this book wants to try to be a stock picker. Most people would be well advised not to be stock pickers. The joys of putting together a portfolio of index funds should have been explained in detail for those people.

3. The section on risk takers and rule breakers wasn't strong enough to teach someone what to look for. That surprised me given that the Gardners have published a book in the past on that very subject.

As a complement for this book, I suggest you also read John Bogle's Common Sense on Mutual Funds: New Imperatives for the Intelligent Investor and Jeremy Siegel's Stocks for the Long Run, 4th Edition: The Definitive Guide to Financial Market Returns And Long Term Investment Strategies.

Good luck!

Thorough AND Understandable, December 30, 2008
By T Rice "ricepaper" (Sunnyside, WA United States)

A book about stock is dependable for a short time only, that is if it only tells you which stocks to buy.

This book works above that level and teaches you how to buy stock NOT which ones to buy; "We're here to inspire you to not only invest, but to invest well."

David and Tom Gardner warn you to accept that you will fail and that starting out you should plan on being wrong fifty percent of the time. That said, they give solid advise like, buy twelve stocks and then hold on to them for a full year at least. don't bail that moment you see a down turn, wait it out and learn.

Three mistakes, Never start saving or investing, starting too late, and the last and main point of this book is picking the wrong stock.

This book is able to walk even a severe novice like me through the ins and outs of buying stock, diversifying or not, what in the world (as in foreign stock) to consider.

It is a thorough and understandable book, two things that don't always go together.

Sound Financial Advice, December 29, 2008
By Jeffrey Peter A. Hauck "Guerrilla Reader" (Pennsylvania USA)

Review of David and Tom Gardner's "The Motley Fool Million Dollar Portfolio: How To Build And Grow A Panic-Proof Investment Portfolio."

The text starts with a preface discussing the "financial collapse of 2008." It set a cautious "take heed" tone for the rest of the volume alerting the reader to the advantages and pitfalls of the weaker market without selling fear.

The rest of the chapters cover the broad investment range of: Learning to think like an investor; Finding a first stock; Dividend investing; Blue-chip bargains; Small-cap treasures; International investing; & Stock selection and asset allocation.

Written in a language I as a layman could understand, "Million Dollar Portfolio" outlines a workable plan for prudent investing for each age bracket. In true optimistic fashion emphasis is placed on the fact that it is never too late to begin investing in your future ("It's Not Too Late to Wake Up and Smell the Coffee (p.143))."

Five stars without reservation for excellent financial advice.

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