Friday, October 2, 2009

Open Letter to the Fool Extraordinaire, the Chief Operating Fool at Motley Fool

October 2, 2009


Reference: You have a Rogue Writer at Motley Fool

Webster’s on-line dictionary defines “Rogue as…

“1: vagrant, tramp 2: a dishonest or worthless person: scoundrel 3: a mischievous person: scamp 4: a horse inclined to shirk or misbehave ...”
If I had my choice, and I surely do, I would call this writer Mr. Adam Wiederman at Motley Fool “a dishonest” person whose writings are “worthless” to the investor community.” Here’s why…

Reason Number One:

On the same day Microvision made the announcement of its first purchase order for their laser PicoP projectors, from the Asian Marketing and Distribution partner, Mr. Wiederman [the rogue writer at Motley Fool] wrote an article…


You’d Be Stupid to Buy These Stocks
By Adam J. Wiederman
September 30, 2009  Comments (7)

"Now is an absolutely ridiculous time to buy small-cap stocks.

"You'd be a dope to snap up shares of companies like Novavax (Nasdaq: NVAX), BioCryst Pharmaceuticals (Nasdaq: BCRX), Microvision (Nasdaq: MVIS), and Vanda Pharmaceuticals (Nasdaq: VNDA) -- all of which are up more than 500% since March's market low."

That's what you might be hearing, now that the small-cap Russell 2000 Index is outpacing the S&P 500 by more than 19 percentage points. Even The Wall Street Journal predicts that the small-cap rally is set to come screeching to a halt.

But don't be duped ...

Just because many small-cap stocks have seen a huge increase in the last few months doesn't mean you should avoid all of them.

And the article continues…

Here’s the link to the full article, in case you’re foolish enough to read any further…

Now we all know that Motley Fool makes no bones about being foolish most of the time, what I didn’t know that they were stupid as well. By being foolish you may look silly or perhaps hurt yourself… but by being stupid and writing an advisory article to influence the investing public, you are hurting others. And that’s a big difference. We don’t care what you do to hurt yourself or look silly while doing it… but we do care when you set out to hurt us.

Enough of name calling!

Here’s the second reason in this open letter to the Fools extraordinaire, the Chief Operating Fool at Motley Fool…

Reason Number Two:

There is an old saying: “a rolling stone gathers no mass.”

So is the “trader” of the modern age… like a rolling stone that gather no [meaning full] portfolio mass in the long term. Let’s face it. A trader is not an investor and your rogue writer’s advice is directed towards such traders. I hope it is, because if he is preaching your insanely dumb sermon to the investor choir you are foolishly naïve and should be committed to “investment education” for the next six months.

Take my example as an investor…

I have always believed in investing in companies that ride the wave of change or bring about the paradigm shift with an eye on the long term growth prospects.

I’m one of those old timers that invested in Intel during its early days as a company… in the early 80’s. I recall buying some shares for a total cost of $1,000 dollars. That was lot of money in those days and commission paid was a disgrace. Stock brokers were king of the hill and roamed the streets like God’s gift to humanity.

I had to liquidate all my position in Intel during the Dot Com bust of 2000… around May of that year. I think it was just before the last stock split the company had. However, it was not all that bad, because I managed to sell pretty close to the all time high and I remember bragging about my good fortune and fortitude to have stayed the course to make over 14,000% profit… for a net gain of over $140,000 dollars. That’s right… over $140,000 in profit including dividends and the stock splits.

In the last 30 odd years that I have been investing, I had my share of good fortune and misfortune. However, what’s important is the fact that I managed to secure my financial future and live today to talk about my strategy of investing in companies that ride the wave of change or bring about a paradigm shift.

Some of these companies have grown to be huge enterprises and have made their early investors, like me, over 10,000% or over since their inception. Some day, I will tell you about my other [early] investment in companies like Dell, Qualcomm, Microsoft, Cisco, Healthsouth [after the 2003 perfect storm] and most recently Microvision. And while Dell has had disappointing returns since the turn of the century, its business is still strong and investors have not even come close to losing everything.

Currently, I’m out of all the stocks except Microvision [Nasdaq: MVIS]. The past performers in my portfolio have served well. However, these companies like Intel, Dell, Qualcomm, Microsoft and Healthsouth are past their hyper growth phase and are now too big and are just slow earnings growth vehicles. No disrespect to these fine companies… it’s just that they don’t fit the “hyper growth” company model any more.

My only stock holding now, besides an options income portfolio, is Microvision. If you would like to find out why I consider Microvision to be the next 50,000% profit producer, then click on the link to the following blog posts and make sure to read all the related articles.

Access to this blog is free and author’s profile will tell you why he is taking this time and making an effort to reach out and share information that already exists in the Internet sphere…

The least you can do, without causing further damage or raising an uproar from the investors community, is to gracefully re-tract the article.

I know, you will look foolish doing it… but then again you are used to it.

Warm regards,

Anant Goel
Investor Extraordinaire