Interestingly flawed logic from Motley Fool

I suppose it’s no surprise that Motley Fool says we have to try to beat the market. If everyone started indexing, they’d all be out of jobs, after all.

So the argument goes that we can follw the “cear path” set by Benjamin Graham, Warren Buffett, Walter Schloss, and Bill Miller (if we listen to Motley Fool). You see, it all very simple:

Figure out what a company is really worth.
Determine how much the stock market is asking for the business.
Invest based on the difference between No. 1 and No. 2.
Wait for the market to realize and correct its mistake.

Actually, I’m thinking that’s a little bit harder than that. I know a few Fool subscribers. None of them are rich…

By the way, if you’re curious they are recommending First Data [NYSE: FDC], Federated Investors [NYSE: FII], and Lloyds TSB [NYSE: LYG]. I actually like Lloyds and its 6.1% dividend.

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