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The Motley Fool Investment Guide: How the Fools Beat Wall Street's Wise Men and How You Can Too

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A completely revised and updated edition of an investing classic to help readers make sense of investing today, full of “solid information and advice for individual investors” ( The Washington Post ).

Today, anyone can be an informed investor, and once you learn to tune out the hype and focus on meaningful factors, you can beat the Street. The Motley Fool Investment Guide, completely revised and updated with clear and witty explanations, deciphers all the current information—from evaluating individual stocks to creating a diverse investment portfolio.

David and Tom Gardner have investing ideas for you, no matter how much time or money you have. This new edition of The Motley Fool Investment Guide is designed for today’s investor, sophisticate and novice alike, with the latest information
—Finding high-growth stocks that will beat the market over the long term
—Identifying volatile young companies that traditional valuation measures may miss
—Using online sources to locate untapped wellsprings of vital information

The Motley Fool rose to fame in the 1990s, based on its early recommendations of stocks such as Amazon.com, PayPal, eBay, and Starbucks. Now this revised edition is tailored to help investors tackle today’s market. “If you’ve been looking for a basic book on investing in the stock market, this is it...The Gardners help empower the amateur investor with tools and strategies to beat the pros” ( Chicago Tribune ).

304 pages, Paperback

Published September 5, 2017

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About the author

Tom Gardner

29 books10 followers
Tom and David Gardner cofounded The Motley Fool, a multi-media financial education company, in 1993. Since then they have co-authored four New York Times bestsellers, including The Motley Fool Investment Guide and The Motley Fool's Rule Breakers, Rule Makers.

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5 stars
215 (40%)
4 stars
226 (42%)
3 stars
73 (13%)
2 stars
11 (2%)
1 star
5 (<1%)
Displaying 1 - 30 of 45 reviews
Profile Image for Taylor Ellwood.
Author 87 books134 followers
June 11, 2019
This is a must read book if you ever plan to retire or you just want to understand how investing works and how it could benefit your life. This latest edition is updated with brilliant insights that can help you get comfortable with investing and learn how to educate yourself. This book will provide you an in-depth tour of how investing works, while also inviting you to learn more. Reading this book and implementing its advice helped me get comfortable with investing my own money in the stock market.
Profile Image for Daniel Cunningham.
229 reviews26 followers
March 19, 2020
The somewhat cheeky style is a trademark of their writing in my limited experience, but at book-length, it gets a bit old. Decent Cliff's Notes on reading balance/cashflow sheets, a handful of targets for ratios, but the first 1/4 (1/3?) is basically, "Don't get overcharged for mutual funds and brokerage fees," which... well, I guess must have an audience.

2.5 stars rounded up.
Profile Image for Mark.
37 reviews
March 29, 2020
This was an excellent compilation of investment foundations. Great for amateur and more experienced investors.
Profile Image for Trung Le.
17 reviews
May 26, 2020
An Awesome Book !

A great and simple investment book ever. I actually subscribe fool.com service which has been very reliable with decent information. This book should be jotted down, taken notes, and learnt as a basic investment textbook for non-financial investors.
Profile Image for econoMisfit.
258 reviews8 followers
July 4, 2020
A great read either you are a beginner or familiar with the market. The strategies laid out are unconventional and effectively tested by the authors. Fun to read as well.
Profile Image for Christopher Lawson.
Author 10 books121 followers
September 5, 2017
In this latest edition of THE MOTLEY FOOL INVESTMENT GUIDE, David and Tom Gardner provide some good investment advice, along with some historical perspective. They note that the stock market has proven to be an excellent investment—but only when viewed over a long time frame: “The Stock Market Is Pretty Close To A Sure Thing If You Have The Proper Timeline.” The longer your time frame, the more likely you will make money.

I especially like the book’s theme that an investors should make their own financial decisions—and not turn over a portfolio to a professional, who has a vested interest in making fees. There’s one person who can best look out for your interests—and it’s not a stock broker. “You are the individual most personally invested in your financial success and, therefore, are the one best suited to make your money decisions.”

The authors emphasize many times throughout the book how poorly actively managed funds do, compared to the market a large. Over the long run, almost all actively managed funds compare poorly. Here’s a good metric: “Standard & Poor’s reports that between 82 percent and 88 percent of all domestic stock mutual funds have underperformed the market’s average return. . . “

Buying index funds for the long-term? Great! You will almost certainly beat all the actively managed funds.

Day-Trading? Well, not so likely.

The authors ask the question, “Why Do Most Funds Underperform?” Well the answer is easy: fees. “The biggest contributor to lagging fund performance is fund expenses.” They point out the very low fees generally charged by index funds—but even there, some funds are greedy. The authors note the very low fees charged by Vanguard. (Note: I notice that the Vanguard 500 Index Fund has an even lower expense ratio than the authors cite. I checked recently, and the expense ratio was only .04%.)

David and Tom spend a lot of time emphasizing how well index funds do over the long run. They encourage active investors to always compare their results to an index fund. In other words, index funds should be the standard of comparison. Nevertheless, they suggest that with proper research, many investors can beat the index funds: “If you’re able and willing to take risk beyond the index fund, there’s a wide, wide world out there. “

All in all, I found THE MOTLEY FOOL INVESTMENT GUIDE to be a good, common-sense guide to investing. I especially appreciate the authors clearly explaining how fees eat up investment returns. The Gardners illustrate so well the advantage of index funds, that I intend to continue in that investment path. (Of course, other readers are likely more ambitious than me.)

If you are planning to actively manage your portfolio, the authors have lots of tips. For example, the appendix also contains some guidelines for hiring a discount broker. I also enjoyed the tongue-in-check investment suggestion anecdotes at the end of the book, as well as the amusing “Favorite Reader Emails.”

see also Bassocantor.com/blog/motley

31 reviews
February 12, 2020
I got a lot of good ideas from reading “The Motley Fool Investment Guide” by David & Tom Gardner. I’ve been following the Motley Fool since the '90s (www.fool.com) and I think their principles are sound.

Basic Philosophy:
+ Think like an owner of a company not a buyer of a stock
+ Expect to hold your position at least five years, so consider where you think this company will be relative to the competition 5-10 years from now
+ Buy companies that:
--Dominate their industry
--With a sustainable competitive advantage
--Led by honest efficient management
--Whose interests are aligned to shareholders

Other key takeaways:
++ The essence of the Motley Fool approach is to leverage compound interest over time. A good company may seem expensive, but it should continue to perform well over time so tiny price fluctuations now will become irrelevant in hindsight.

++ Take your time and be willing to do nothing. It’s human nature to want to take action, especially in rough times, but that is when you can do the most damage. Be patient.

++ Monitor your holdings but don’t obsess or over-analyze. Watch quarterly reporting and look for underlying reasons for variances from expectations. Is this temporary or structural?

++ Track your performance against benchmarks like the S&P 500. If you’re under-performing (after ALL costs are accounted) then you’re doing it wrong. Better to just buy an index fund.

Five Basic Investing Lessons:
1. Don’t invest in anything you don’t understand
2. Manage your own money if you have the time and instinct
3. Don’t fall in love with any given investment
4. Make sure you understand the incentives of the people giving you advice
5. Fight the urge to concentrate on short-term gains; think long-term
67 reviews1 follower
June 29, 2020
This is a great book for someone who has no idea how to start investing. Its very fun to see how the motley fool podcast information resonates in this book(not as an ad, but rather by its content) and is extended to breakdown what it takes to be able to pick stocks out for the long run. It does show the power of many investing vehicles, including mutual fund, stock, index funds, shorting, and options, and their pros and cons. It puts greater emphasis to picking your own stock as an individual, but recognizes the value to either to hire someone that does above market indexes, or just plainly do the index funds. It also wraps up at the end on how to start, some definitions on some terminology(I wish they actually expanded more on this), and a motley fool fool’s day jokes(which they should keep doing) to tie it up. It also demonstrates in more detail how Tom and David invest, the two CEO, which is nice to see how they compare and contrast. All in all, a great book updated to relate the times.
154 reviews7 followers
January 1, 2020
There are a few things I didn’t like, both in content and writing, like that there is too much humor in the book which kind of set it of as unprofessional, it’s inept in a stock market investing book, and there is advocation to follow risky investing too, which surprised me as very odd. The 100 pages were useless, and the book is about 240 pages, so that’s almost 40%.
Still, the book deserves five stars for presenting something new to me when it come to evaluating a company, which is to evaluate it by looking at culture, operation team, strategies and not statistics and figure in the report alone. And even for statistics, it presents new metrics to compare with when considering investing in a company, and covers figures in the report and explaining them.
There are also many more things that were addressed in the book that I heard before and always wanted to learn. I rate book upon the knowledge manifested, and this one did it subtly.
72 reviews1 follower
January 30, 2021
It's best to get past the "discussion" areas in the book as they are rather verbose.

However, the sections of the book which cover what one should look for in an investment as well as how to research companies and understand their balance sheets and fiscal statements, what ratios and fundamentals to use to screen potential investments, etc. was all great. Although this is very similar to what other investment books discuss (understandably since most are value/growth investment books) but it is discussed in a much more understandable and beginner friendly manner.

A good read for those looking to manage their own money and not knowing where to start.
Profile Image for Daniel.
197 reviews7 followers
September 12, 2022
A comprehensive book on investment which covers the art and science of picking stocks. I like how the book warns against the practice of day trading and urges patience. The coverage of how to assess small cap investment was very informative and the strategies offered are accessible to lay readers. The book had the feel of being a marketing mechanism for the Fool’s website and fee based services, though the advice given does give the reader a road map towards investing and making good consumer choices. The advice on Mutual Funds and ETFs was particularly good, and was presented as the counter argument to stock picking. Passively managed Mutual Fund or ETF which follow the leading indexes do have good returns and outperform the efforts of actively managed funds and “day traders,” and the fools let you know this. They Fools also teach how to take risks which can outperform the markets. I like this book and will refer back to it often.
Profile Image for Kay Strain.
1 review
November 25, 2017

Whether you are a beginner or a long-time investor, this book is a good one. For beginners, it is full of investing principles and is written in an easy-to-understand, conversational style. It gives you tips on how to spot small, fast-growing companies that could be around for the long-term; and it provides warning signs to heed. It guides you through the basics of financial statements, but equally valuable is the practical advice — “Foolish” (capital “F”) as they call it. It’s worth your time. — Mike Strain
Profile Image for Andrew Imrie.
50 reviews1 follower
May 5, 2019
A bit disappointed really. The first UK edition (published almost 20 years ago) had a huge impact on helping me navigate my way to putting my finances / investments in order (i.e. avoid managed funds and most financial advisers, utilize low cost index tracker funds, etc). But since then the Motley Fool have gone a bit weird - regularly blitzing people with advertisements for their subscription services - and then the second half of this book, which seems to go against their earlier advice by saying that, yes, you can beat the market after all. For the average person, I'm not convinced.
Profile Image for Dick.
150 reviews4 followers
November 24, 2018
I’m a long admirer of David and Tom Gardner. Their philosophy on growth stock investing is a good complement with Buffett’s value investing for any long term investors. When I bought the book I was well aware that this is supposed to be a basic investing guide for beginners, and given that I’m already a close followers of the author, it’s such a pleasant surprises that I still managed to have picked up some great new concepts from the book. It exceeded my expectation.

Profile Image for Desmond.
18 reviews
May 23, 2020
This book is amazing. I’ve never found a book on investing that strikes such a balance between making money over the long term while showing genuine for concern in where and when that money is investing. Tom and David Gardner show you how to make smart investments (Foolishly, with a capital “F”) in a deliberate way. I have read this book twice. It’s great for the young and old, novice and experienced.
Profile Image for Yat Sing Ip.
203 reviews2 followers
March 11, 2021
I found this book a gem among so many investment books out there. The authors have simplified the key things to look out for, as well as covered the more advanced topics such as options, shorting and margin trading.

If you have to zoom in on the key, read the chapters on the Five Tenets to Everlasting Investing. That would set you up to understand their approach.

Highly recommended read for everyone into investing, no matter what stage of your journey you're at.
Profile Image for VanessaRC.
27 reviews
December 20, 2021
A lot of these types of books have clear bias towards an investment path/methodology or approach. While it's clear how the writers of the book choose to invest, it gives you really good tools for a better understanding when choosing any type of investment for yourself. I value that, I want to have the knowledge this book offers, and the opinions as secondary material, and it's exactly what I got.
I am keeping it close.
918 reviews6 followers
September 25, 2017
This is a good book for investors who are starting out in their investment journey. Since i'm not in that demographic I did not find it too useful. Also, if you are looking for specific stock picks you are going to be disappointed. The tools are there. Apply them and you can build a good investment portfolio.
53 reviews1 follower
December 11, 2017
This is the one book that anyone who wants to start investing should read first. Written for investors of all levels, from novices who know nothing, to the advanced who want to improve. The first edition of this book back in the 1990's set me on the course for a successful financial life, and this new edition brings everything up to date.
Profile Image for Diko Raditya.
13 reviews1 follower
December 27, 2020
Sometimes being a fool is better than being a wise. This book will cover many type of investment, from safer one like mutual and index fund, to the riskier one like shorting stock, and stock option. And it will tell you the reason to and not to go for it, with easy example to follow. Definitely a must read for new investor
Profile Image for Rick.
166 reviews3 followers
February 21, 2021
Small investors basically have two good choices: invest in low cost index funds, or use simple strategies that bring you advantages that investment funds can't use. This book clearly and simply explains both. I'd like them to write a book with more detail, but I suppose that's why they have a huge web presence and a bunch of subscription services.
Profile Image for Ryan.
1 review1 follower
April 29, 2021
For someone financially illiterate like me, this book taught me so much. I’d say it teaches the basics and gives some tips and strategies on how to invest. Explains everything simply, even the math stuff which was good. Tough to pick up because it’s finance.. blah, but once you commit it’s actually easy to read and witty
84 reviews43 followers
June 27, 2022
First published in 1996 (re-pub 2017), all lessons shared and explained in this book remain valid in markets even today. Successfully investing in small caps remains one of the most difficult achievements for even the most savvy investors. They have explained their approach to small-caps investing which I have particularly liked.
Profile Image for Michael.
1,034 reviews2 followers
December 24, 2017
Full of great information. A very informative read. This was the first Motley Fool Guide
I and read and I enjoyed it very much. Well written and easy to understand. I won this book in a GoodReads Giveaway.
3 reviews
February 29, 2020
Nice book, the author talks in detail about his/her approach while assessing businesses , Focussing on certain aspects of daunting financial statements and the reasons for it - this is certainly a handy tool in any investors arsenal.
Profile Image for Daryl Henry.
94 reviews
July 16, 2021
A good, common sense book that provides a framework on how to think about the stock market.

It’s encouraging to think that average people can beat the s&p 500 with the right strategy and discipline
Profile Image for Dann.
337 reviews8 followers
August 14, 2021
Great investing advice, but somewhat childish writing (which I realize is sort of on brand for the Fool, but gets annoying by the end of the book). Definitely could have been presented as 10–12 bulleted lists that could be read in 30 minutes. Definitely best for investors new to the game.
Profile Image for Love Allman.
1 review
December 14, 2017
I received this book in the giveaways and it arrived lightning fast. Thank you. I have not read this book because I am not an investor. I am giving it as a gift. Thank you very much!!
Profile Image for Susan Csoke.
506 reviews10 followers
December 18, 2017
This revised and updated third edition is loaded with all the information that is needed to be a successful investor. Thank you Goodreads for this free book!!!!!
Displaying 1 - 30 of 45 reviews

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