 Logo since 2020[1] | |
| Type of business | Private |
|---|---|
Type of site | Financial advisory services |
| Founded | July 1993; 32 years ago (1993-07) |
| Headquarters | , |
| Area served | United States,United Kingdom,Australia,Canada,Germany,Japan,Hong Kong |
| Owner | The Motley Fool, LLC |
| Founders |
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| URL | www |
The Motley Fool is a private financial andinvesting advice company based inAlexandria, Virginia. It was founded in July 1993 by co-chairmen and brothersDavid Gardner andTom Gardner, and Todd Etter and Erik Rydholm.[2][3][4] The company employs over 300 people worldwide.[5]
The name “Motley Fool” is taken from Shakespeare's comedyAs You Like It. It references the one character – the courtjester – who could speak the truth to the Duke without having his head lopped off.[6]
In 1994, The Motley Fool published a series of statements online promoting a nonexistent sewage-disposal company.[7] The messages, which were anApril Fool's joke designed to teach a lesson aboutpenny stock investing, garnered widespread attention, including an article inThe Wall Street Journal.[8] In August that year, the Gardners parlayed their one-year-old investment newsletter into a content partnership withAmerica Online (AOL).[9] In December, they were profiled in the "Talk of the Town" section of theNew Yorker.[10]
In 1996, David and Tom Gardner publishedThe Motley Fool Investment Guide, which ranked on bestseller lists forThe New York Times andBloomberg Businessweek. The book was controversial;Bloomberg wrote about The Motley Fool's "Fanatical following",[11] while aPBSFrontline episode described the company as made up of "20-somethings" giving "so-called advice".[12]
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.[13][14]
In the late 1990s, the Motley Fool publicized their "Foolish Four" method ofsystematic trading, adapted from theDogs of the Dow method for selecting stocks from theDow Jones Industrial Average based on highdividend yield. They published a book on the topic in 1999.[15] JournalistJason Zweig criticized the Foolish Four method in 1999.[16] 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 variousvaluation methods. However, Zweig said the Motley Fool staff made outlandish claims such as the ability to "crushmutual funds [in] only 15 minutes a year", used needlessly complicated mathematical formulas and he questioned the method's effectiveness.[17] 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".[18][better source needed] In 1999, McQueen and Thorley wrote a light hearted paper that used the Foolish Four portfolio to illustrate the limitations of any trading strategy based on data mining historical returns data, especially one described in a best selling book.[19]
During thedot-com bubble and market collapse of 2001, the Motley Fool company removed 80% of its staff in three rounds of layoffs.[20]
In February 2002, The Motley Fool shifted to asubscription-based business model.[21] The company launched its Stock Advisor program, offering subscribers monthly stock picks and premium investment education.[22]
The company also established free and subscription-based businesses in several countries. As of 2023, The Motley Fool has operations in the United Kingdom, Australia, and Canada.[23] In October 2019, the company announced that it was shutting down operations in Singapore.[24] A year later, in October 2020, the company announced that it was also shutting down operations in Hong Kong.[25]
In August 2018, the company launched a personal-finance sub-brand called The Ascent[26] to provide personal finance product reviews and free educational resources.
In September 2019, the Motley Fool launched two more sub-brands. Millionacres provides subscription-basedreal estate investing advice and real estate resources.[27]
On September 17, 2019, the Motley Fool launched itsmobile game, Investor Island.[28]
Representatives of The Motley Fool have testified before Congress against mutual fund fees,[29] in support of fair financial disclosure,[30] on theEnron scandal,[31] and theIPO process.[32]
In 1999, theSecurities and Exchange Commission proposedRegulation Fair Disclosure, 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.[33] The regulation passed, and in the July 2, 2001, edition ofThe Wall Street Journal, former SEC chairmanArthur Levitt is quoted saying, "Two-thirds of our letters came from Fools. Without them, Reg FD would not have happened".[13]
Media related toThe Motley Fool at Wikimedia Commons