A Fool and his money are buying stocks Online firm advises investors to stay away from mutual funds



Go ahead, call Robert Sheard a fool. He won't mind.

In fact, he'll be flattered.

Sheard, a Lexington, Ky. writer for the Motley Fool online investment advice service, shuns those he and fellow Fools call the Wise.

Being a Foolish investor, says the Motley Fool, means making your own investment decisions, trading minimally, avoiding high-fee brokers and buying individual stocks instead of mutual funds.

Meanwhile, the Wise of Wall Street would advise just the opposite.

"A Fool makes his own decisions. That's probably the most important thing [about investing]," Sheard said. "You have to learn enough to be independent of someone else's advice."

The Motley Fool started out as a newsletter published in Alexandria, Va., by brothers David and Tom Gardner.

The Fool went online in August 1994, providing free investment advice on America Online (keyword: Fool) and later on the World Wide Web (www.fool.com).

Sheard, 37, writes the "Daily Dow" online column for the Motley Fool from his Lexington home, where he lives with his wife, Cynthia, an English professor at the University of Kentucky, and son, Brenden, 5.

Talk about a sweet job.

But Sheard has a tough time explaining to people what it is he does.

"I keep my neighbors endlessly confused. They still don't believe I have a real job and keep wondering when the bank is going to repossess my house and car. Ditto for my parents," Sheard wrote in his Thanksgiving column.

In the "Daily Dow," Sheard answers readers' questions about retirement, the new Roth IRA and investing techniques.

Sheard also takes every opportunity to blast mutual funds -- 82 percent of which have failed to match the Standard & Poor's 500 index for the past 10 years, his research shows.

"I basically was [the Motley Fool's] ideal reader. I knew very little about investing," Sheard said.

"I had been investing for several years. But like most people I had invested through mutual funds, and when I really went back and examined them, they weren't doing too well. And that was partly the impetus to get me into stock-market investing," he said.

Sheard doesn't have a "Wall Street pedigree," he said. In fact, he was teaching English at Georgetown College and the University of Kentucky when he stumbled onto the Motley Fool Internet site in 1994.

Less than a year later, Sheard, a scholar of contemporary British literature, had traded the classroom for a modem and home office.

He even halted work on his doctoral dissertation with one chapter to go. His father still has a tough time understanding that, Sheard said.

Sheard found the Motley Fool "almost completely by chance." While on AOL one day Sheard noticed an icon for the Motley Fool with the words "Shakespeare and Investing" beneath it.

"I thought, 'How can you put those two together?' I just clicked onto it just to see what it was, and I never left," Sheard said. "I got sucked right in because the guys who started this are former English majors too, and they have a great sense of humor and are great writers."

What do Shakespeare and investing have to do with each other? The Gardners perceive themselves and their service as being akin to a court jester who can tell it like it is.

In fact, they named their service after a line in Shakespeare's "As You Like It: "

L "A fool, a fool! I met a fool i' the forest, a motley fool."

"In Shakespeare, the fool is the one person at court who can tell it like it is without risking losing his head," Sheard said.

"That's basically what we see our mission as with the Wall Street community: telling the individual investor what is really going on without having any conflict of interest. We're not selling anything. They can read all of our stuff for free. They can take it for what it's worth."

He liked what he read in Motley Fool so much that Sheard asked the Gardners to let him work for them. He "volunteered" for the Fool in 1994, acting as host for chats in exchange for Internet service. He went full time in 1995.

"The readers I talk to every day are very much like I was two years ago. They know just enough that they don't know what they need to know," Sheard said.

"I've always tried to make it real clear that I don't have a Wall Street pedigree. But I've been able to teach myself enough that I can do as well as someone on Wall Street is going to do for me -- without paying a huge brokerage fee."

Yep, Sheard sure is a Fool.

Pub Date: 1/26/98

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