David Gardner on the Fool
by David Gardner

ALEXANDRIA, VA (Aug. 4, 1997) -- Three years ago this merry day, Foolishness was truly born.

Erik Rydholm, Tom Gardner, and I had been running a silly little newsletter for our friends (or, as it turned out, our parents' friends) the previous year. It had the name The Motley Fool, and we'd been written up briefly in The Wall Street Journal, and again in Forbes. What lay in store for us online, however, we'd never have guessed.

Oh sure, it wasn't a tough decision to make at the time. We closed down our small print newsletter -- which we believed would pay us more than we'd get from AOL that first year, which we were wrong about -- in order to start something that would surely be forward-thinking, surely be "The Future" eventually, whenever The Future should prove to emerge.

On this day, I can say with certainty that The Future is here. Three years later, we have half a million online readers, five million newspaper readers, one decent book and a couple more on the way in '98, and 95 full-time employees. But those achievements pale in comparison to the scope of our future plans. We think we've made a good start, nothing more.

Most important, it's just been one heck of a lot of fun! From the pinball machine here in Fool HQ that we're constantly breaking due to overuse, to a great bull market with a market-doubling portfolio, to the opportunity to hire and work alongside many of our best friends, it has been fun, fun, fun. And our daddy ain't taking our T-bird away, either. So we're looking for much more of same, and expect to provide oodles for you. As a company, we will be entering many new fields in the next 10 years, doing so always with the idea of debunking the conventional wisdom, improving the consumer experience, and spreading sweetness and light ahead and behind, creating shared pleasures for our customers.

Yeah, I'm proud to be a Fool. And it's my earnest hope that you share these very same sentiments, dear reader, with every bit as much fervor. Foolishness is open to all -- only those without a sense of humor, an open mind, or a kind spirit need not board The Ship of Fools. From everyone here at Fool HQ, I wish to thank you deeply for your support of our efforts. And as always, we rely as much on your constructive criticism as your praise. Please keep both flowing copiously, as together we encounter the friendly trade winds and occasional dark shoals of Life.

Three years to the day since the launch of The Fool Portfolio, we sit on a total market return (all expenses deducted) of 214%. That's exactly double the S&P 500 over the same period, which closed today up 107%. There were certainly no guarantees when Tom and I sat down and started this on August 4, 1994 that we would beat the market. We started the portfolio with the idea that average investors would beat Wall Street if they followed a Foolish strategy and vowed to learn from their (many) mistakes. Over any short-term period, you never quite know how you'll do, but as the days pass and short terms become longer terms, we will continue to validate for thousands of you the completely Foolish notion that you can invest in the stock market on your own, beat the "experts" managing the mutual funds, learn more, make more, feel more confident, and ultimately pass on to your descendants a great deal of learning and money. To use a phrase we'll coin in our next book (out in January), we'll aim to help you become hands-down...

...your family's Most Beloved Ancestor.

Together, we've lived through a superlative recent period in the American stock market. We know that the market declines from time to time, sometimes dramatically, sometimes for a long time. True Fools know these days will come, but they won't cause us to change our tune. Long-term investment in the U.S. stock market is the best game going on planet Earth, and there's nothing that leads me to believe today that investing in American growth companies over the next 50 years won't do AT LEAST as well as the previous 50. In the end, what counts? Foolishness, baby:

Fools don't claim that cats bark, but they talk about cats when
everyone else is talking about dogs. They offend all the rules of
conversation, and when they really offend, they're magnificent....
Umberto Eco, Foucault's Pendulum

Neither man nor woman can be worth anything until they have discovered
that they are Fools. This is the first step towards becoming either
estimable or agreeable; and until it be taken there is no hope.
The sooner the discovery is made the better, as there is more
time and power for taking advantage of it.
Lord Melbourne (1779-1848), English statesman, prime minister

Let no man deceive himself. If any man among you seemeth to
be wise in this world, let him become a Fool, that he may be wise.
For the wisdom of this world is foolishness with God.
1 Corinthians 3:18-19.

I have great faith in Fools: self-confidence, my friends call it.
Edgar Allan Poe

Cheers.

--- David Gardner, August 4, 1997

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