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FYI - Night Talk: An Interview With David Gardner And Tom Gardner of Montley Fool 16 Jan 09

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January 16, 2009 – Comments (9) | RELATED TICKERS: ISRG

9 Comments – Post Your Own

#1) On January 16, 2009 at 9:26 AM, djemonk (< 20) wrote:

They were here in NYC yesterday.  I had a commitment last night, otherwise I would have loved to hear them speak.

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#2) On January 16, 2009 at 1:30 PM, rwandamassacre (99.81) wrote:

My favorite parts of the interview:

1. Question: why didn't you write this book on a "panic-proof" portfolio two years ago when it actually may have helped people avoid the stock market crash?

David's answer: we didn't foresee the stock market crash, so we started writing a book two years ago that didn't address the crash and have retitled it now after the fact to make it more marketable.

2. Question: What percentage of a model portfolio should be in equities, bonds, commodities, etc.?

Tom's answer: We don't know anything about asset allocation. What we do know is that you should have a long time horizon. But wait, some elderly people don't have a long time horizon so next question?

3. What return do you target in your equity portfolios?

David's answer: We target a 10% absolute annual return. No we don't. What we actually do is target a relative annual return that is 3% to 5% above the S&P 500. So if the S&P 500 loses 20%, we have accomplished our objective if our portfolios lose "only" 15% to 17%.

 

 

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#3) On January 16, 2009 at 1:46 PM, rwandamassacre (99.81) wrote:

Here's a question that I wished had been asked:

Question: The book is titled after a real-money million dollar portfolio that the Fool manages, correct?

Tom's answer: Correct. Well, actually, it is no longer a million dollars. It has dropped to less than $700,000.

Question: Hmm...so how exactly is that panic proof? Couldn't investors lose 30% of their money without your help?

Tom's answer: Ummm....sure they could. What's your point?

 

 

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#4) On January 16, 2009 at 4:57 PM, BradAllenton (31.73) wrote:

I watched some of that interview and wished I could buy puts on those 2 idiots reputation. I file them under useless with Moodys, S&P, boobs on a bull, and seat belts for kamakazi pilots.

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#5) On January 16, 2009 at 5:16 PM, TMFTomG (90.60) wrote:

An interesting set of replies. The beauty of administering to a community for 15 years is that your skin thickens. Here are some different perspectives on a few of the comments:

 1) Should David had said he saw the market crash coming? The honest answer is that we, along with the numerous others, did not expect such a deep downturn. I certainly wasn't surprised to see the markets come down 20% from highs. I was not expecting to see the added drop, much of which I think will be retraced over the next few years. I thought it was an honest answer by Dave, matching one of our core values.

 2) You're right that I dodged the asset allocation question, and there's a reason for it. Asset allocation is intensely circumstantial. Buffett thinks asset allocation is a joke, and for him, that makes sense. A 75-year-old with no investment experience would take a different approach. Same with a 27-year-old with a six-year history working at Vanguard, passionate about investing. For that reason, I anchored on the one thing that I believe carries across all investors. . stay away from equities if you do not have the appropriate time horizon.

 3) Funny, you take issue with targeting returns versus the S&P 500. What you are saying is that over the last 75 years, during which the market has appreicated at about a rate of 10% per year, you'd rather that the equity portion of your portfolio had deliverd 5% annualized returns with no down years. I could criticize that flippantly, too. You may disagree with our approach, but we have stated it clearly and repeatedly. We believe that for lifelong investors, the appropriate aim is to beat the S&P 500 after fees and taxes. . . believing, as we do (and as Mr. Buffet does) that equity values will rise in the US and that it's never a great idea to be a long-term pessimist about the American economy.

 4) We do not shy away at all from mentioning the results of any of our services. And so, yes, the Million Dollar Portfolio is no longer showing a million dollars in it. The same happens to be true of any long-only portfolio started in October 2007. The poster will be happy to know that on a CNBC interview today, I talked about how we're a few hundred thousand dollars short of a million today. . and I talked about how that doesn't faze us. Do you think Warren Buffett should be tearing hair out and flushed because Berskhire is off 33%? If you take the long-term perspective, even if you are surprised by how deeply the market turns down, you try to keep adding new money and focusing rolling 10-year investment returns.

 5) When Charlie Munger lost 55% of his portfolio in the 1970s and when Shelby Davis lost around 60% of his portfolio, you would've shorted them, I suspect. Regardless, our aim is to build the world's greatest investment community, where the brightest minds have a platform to teach and learn from each other. I hope you're enjoying it as much as I am.

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#6) On January 16, 2009 at 5:33 PM, BradAllenton (31.73) wrote:

Beating the S&P is one of the biggest frauds sold to the investment world. It implies that the S&P will go up over time because it always did in the past. If the S&P dropped 10% a year for 10 yrs, but you lost only 8% a year for 10 yrs. you would be poor. We all know that the past IS the past. If the S&P drops and you drop less, declare victory?

The whole TMF point of view is flawed and that's why you didn't see the down turn coming. There is no pride in being the tallest guy in a room full of dwarves. WOW!! the market sucked, but at least I sucked less. That's a great game plan......fluff yourself while losing money. The goal in investing should be positive returns, period the end.

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#7) On January 16, 2009 at 11:47 PM, SuperPicks (29.72) wrote:

Thanks for the video and thanks to the Motley Fool for creating the innovative CAPs community, unlike anything else in the world today.  The transparency, accountability in returns, community interaction,, and lack of ability to cheat make CAPs the number one in its class.

Additionally, having a community of freethinking members with the ability to express their opinions, views, and attitudes without censorship has made CAPS an amazing experience thus far since 2006.  However, I have heard of a member or two from teh past be banned outright, was it LordZ or something of the sort?

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#8) On January 17, 2009 at 12:30 PM, RonChapmanJr (98.37) wrote:

"lack of ability to cheat" - what?  some research into the top CAPS players will show that statement to be false.

ron

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#9) On January 19, 2009 at 4:51 PM, SuperPicks (29.72) wrote:

RonChapmanJr

I assume you are referring to the ability to short stocks on CAPs that cannot really be shorted in real life?

If that's the case, I wonder if CAPs could be suggested to be modified to only be able to short stocks that can have options written to it (so even if they cant be shorted, put options can be purchased)...

would that make sense?

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