We're Changing The Rules Of Share Tipping

Published in Investing on 19 October 2009

The Motley Fool is investing £50,000 of its own money in Champion Shares PRO.

I'd like to tell you about a brand new product from The Motley Fool. I think it's our most exciting launch ever and you have the chance to be there right from the very beginning.

But First, A Little Background…

You may have heard that, over in the US, Fool co-founders Tom and David Gardner each recently transferred $1 million in Motley Fool funds into separate real-money public portfolios. 

We think this approach is a massive improvement over more traditional share-tipping services. An ordinary newsletter gives a non-stop stream of new recommendations, regardless of market conditions. But in reality, sometimes it's best just to hold the shares you have, or perhaps hold some cash if share prices in general look too expensive.

With the real-money portfolio approach, we're not obliged to pick investments on a regular basis. We'll only pick shares when we think they offer the most potential. You can see when we buy, when we sell and why. You'll also see how we manage the portfolio as a whole -- just as you need to do with your own investments.  

Thousands of US investors have joined Tom and David. Some are matching their every move with their own portfolios. Others are cherry picking the ideas they like the best.  Both these portfolios are now closed to new members -- that's the bad news.

The great news is that, next week, The Motley Fool UK is launching its very own real-money portfolio called Champion Shares PRO. Trades will be announced by email at least two days in advance, meaning you'll have the chance to buy and sell before we do. What's more, all trading costs will be reflected in the portfolio's performance, meaning its return will be an accurate reflection of the returns you are able to achieve.

A Decade Of Investing Success

With Champion Shares PRO, we're also putting together two of the Fool's great investing minds. 

You may have heard of Maynard Paton. He is the Chief Investment Analyst here at Fool UK and has been with us since 1999. His aim has always been to help our members build real wealth by investing in quality companies.

Maynard has compiled a decade-long run of public, market-beating share recommendations. When he ran the Qualiport from 1999 to 2005, his total return was 21.1%*, compared to the FTSE All-Share's total return of 3.7%*. He then ran Champion Shares from September 2005 to October 2009, producing an 11.7%** return, compared to a 5.7%** return from the All-Share.

Maynard's performance in 2009 has been particularly impressive. This article has full details.

Quid Pro Kuo

I am delighted to say that David Kuo will be joining Maynard on Champion Shares PRO.

David needs little introduction, as he can be seen commenting regularly on the BBC, Sky and CNBC. He can also been heard frequently on the radio and provides commentary for Reuters plus a number of publications. 

He'll bring a whole new perspective to the service. David will provide an economic overview and give you insight into the latest thoughts of the well-known UK investment figures he meets through his regular media appearances.

£50,000 Of Motley Fool Money

The Motley Fool is trusting Maynard and David to invest £50,000 of its own money in the stock market. We've set up an account with The Motley Fool Share Dealing service, which they'll use to buy and sell their preferred investments.

You'll be able to follow their every move with the buy and sell alerts. You'll also get a weekly update with Maynard and David's latest thoughts on the markets, investing strategies and trends. There will be updates as and when any company in the portfolio issues results or other information relevant to its investment credentials.

You want more? There will be a watch list of around 30 companies the PRO team is monitoring closely, looking for the best buying opportunity. There are also dedicated discussion boards which will allow you to swap ideas and talk tactics with Maynard, David and your fellow subscribers.

All these features, and much more, will be available on the dedicated Champion Shares PRO website. 

When Does It Start?

Champion Shares PRO will go live on Tuesday 27 October. Because we want this to be an exclusive service, we will be shutting the doors to new members the day before.

So if you want to get in on the ground floor, you need to sign up right away. You get a free trial for 30 days so, if you decide the service is not what you're looking for, there will be no charge at all.

If you're an existing Champion Shares subscriber, don't worry. Your membership will be automatically transferred over to Champion Shares PRO.

> Click for your private invitation to Champion Shares PRO.

 

.................................................................

* Maynard wrote his first Qualiport article on 24 November 1999 when the portfolio's value was £20,039. The Qualiport then added a further £4,000 to its portfolio during 2000. The portfolio closed on 5 September 2005 when its value was £29,103 -- equivalent to a £5,064 profit. Had the Qualiport invested in the FTSE All-Share total return index instead, the value would have been £24,935 -- equivalent to a £896 profit. Qualiport returns include paid dividends and all costs. The FTSE All-Share total return index includes re-invested dividends and excludes costs. Click to read Maynard's full Qualiport performance.

** Champion Shares returns are based on mid prices taken on publication of the 'buy' advice and include paid/due dividends but exclude costs. FTSE All-Share returns are based on the FTSE All-Share total return index, which includes re-invested dividends and excludes costs, and taken on publication of the 'buy' advice. Returns are calculated using closing prices on 14 October 2009 or at the time of the 'sell' advice.

Champion Shares PRO is a Motley Fool Product authorised by The McHattie Group, St Brandon's House, 29 Great George Street, Bristol, BS1 5QT.

Tel: 01179 200 070 | Fax: 01179 200 071 | Email: enquiries@mchattie.co.uk

The McHattie Group is authorised and regulated by the Financial Services Authority.

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Comments

The opinions expressed here are those of the individual writers and are not representative of The Motley Fool. If you spot any comments that are unsuitable hit the flag to alert our moderators.

rober09 19 Oct 2009 , 5:00pm

?why only £50,000. It does not suggest much faith in the idea does it.

SteJD 19 Oct 2009 , 8:05pm

How much money would one realistically need to invest along with Payton and Qou in order for this to be worth while?

TMFMayn 20 Oct 2009 , 8:14am

Hello SteJD,

[I]How much money would one realistically need to invest along with Payton and Qou in order for this to be worth while?[/i]

You don't need £50,000. I'd say anyone with a few hundred pounds to invest could use PRO. Sure you won't be able to match the entire PRO portfolio, but you could pick and choose from some of the shares selected. Just as important to your returns I feel is that you learn from PRO about investing, looking at stocks etc, and so one day you can venture out and pick your own investments.

Foolish Best

Mayn

TMFMayn 20 Oct 2009 , 8:24am

Hello rober09

?why only £50,000. It does not suggest much faith in the idea does it.

We guessed many ordinary investors at home would have portfolios of about £50,000, so we thought that a reasonable figure that would not really impede us in terms of diversification. But whether the portfolio was £5,000 or £5m, I don't think it matters. What counts is the performance of the shares over time and what the members of service learn from the experience.

Foolish Best

Mayn

cliffoa123 20 Oct 2009 , 11:36am

Hi

I'm quite new to shares so am thinking of using CSP to learn as I go along. I work full time so don't have that much spare time, so will probably start by emulating the buys and sells of the CSP portfolio. I don't have £50k to invest, but I can find £5k to invest, so will simply buy/sell 10% of what CSP folio does.

Does that make sense? I'm not sure whether dealing charges will distort my folio as they will have a higher impact on my smaller fund compared to the CSP folio. I guess a lot will depend on how often CSP makes trades. Can anyone tell me if there are likely to be dozens of trades every month, or a much smaller number? The higher the number of trades, the bigger impact they will have on my £5k portfolio compared to the £50k CSP one, making it less feasible for me to try and emulate it.

Also, does anyone know whether CSP are likely to get their whole £50k invested in the market fairly quickly, then make selling and buying decisions throughout the year, or are they likely to drip it in over a few months? I guess the former rather than the latter, but as I wasn't signed up to the previous Champion Shares, I'm not really sure.

Any answers or suggestions gratefully received.


TMFMayn 20 Oct 2009 , 12:14pm

Hello cliffoa123

I guess a lot will depend on how often CSP makes trades. Can anyone tell me if there are likely to be dozens of trades every month, or a much smaller number?...Also, does anyone know whether CSP are likely to get their whole £50k invested in the market fairly quickly, then make selling and buying decisions throughout the year, or are they likely to drip it in over a few months?

Thanks for your interest in Champion Shares PRO. It is highly unlikely there will be dozens of trades every month. It will be a much smaller number on average, and the number will reduce as the portfolio becomes invested. The service is generally aimed at patient, longer-term investors. I doubt the portfolio will be invested fully very quickly, although a lot might be dependent on market conditions. It may take months, maybe beyond a year, who knows, to be fully invested. There will be no rush.

Foolish Best

Mayn

Tinpar 21 Oct 2009 , 5:31pm

Mayn
What is your view on online 'stock picking' systems..? I guess these rely on historic data to plot where the computer software thinks the next big rise will occur.
Are these systems worth investing £000's in..?
My 'sensible head' tells me that if it was that easy - you would be doing it..!

AlanMason1 22 Oct 2009 , 1:07am

I am considering this system to invest £5000, I don't have a share dealing account yet, what type of account will I need, a share dealing account or a ShareBuilder?
Alan

cliffoa123 22 Oct 2009 , 9:59am

Thanks for answer to previous Q Mayn. Be interested in your answer to AlanMason1's question about the best kind of share dealing/sharebuilder account for CSP. Also, will it be ISA-ble, or could there be trades in investments that aren't allowed in ISAs?

TMFMayn 22 Oct 2009 , 10:54am

Hello Tinpar,

What is your view on online 'stock picking' systems..? I guess these rely on historic data to plot where the computer software thinks the next big rise will occur.
Are these systems worth investing £000's in..?
My 'sensible head' tells me that if it was that easy - you would be doing it..!


Yes, they seem to use historic data to find patterns and extrapolate them, though there is every chance the patterns are in gact just random and not persistent. If it were all that easy the richest person in the world would be a computer.

Mayn

TMFMayn 22 Oct 2009 , 10:59am

Hello Alan, cliffoa123

I am considering this system to invest £5000, I don't have a share dealing account yet, what type of account will I need, a share dealing account or a ShareBuilder?

Well the sharebuilder service can only invest on certain days every month, and I understand you have to set your order in advance so you are never sure what price you deal. PRO will use an ordinary share dealing account and deal in real time. PRO will buy AIM shares, which can not be held in ISAs, so anyone following at home with just self-select ISA swill need to open an alternative dealing account.

Mayn

Sadiesage 22 Oct 2009 , 3:46pm

I like the concept but have reservations about the introductory timing of it, e.g, post such a dramatic rise in share prices over the past six months or so.

Whilst comforted by your earlier response to a question about drip feeding funds into the market, even it takes a year or so to get fully invested - there's no rush, it would be a pity if you got the timing badly wrong to undermine the project.

Next year is likely to be a difficult one for the markets after such a heady rise, don't you think?

Given the ending of QE at some point, the threat to the gilt market on this news, as well as the deluge of issuance etc, not to mention an eventual rise in interest rates and the inflationary outlook, the portents don't look too good to me.

Whilst I recognise there's never an ideal time to launch such an adventure, might not a deferred opening be an expedient move?

I'm not trying to be a party pooper but in an election year where we're promised a period of austerity post the result, your quality selections might be overwhelmed by events beyond your control.

I'll watch from the sidelines and hope you're successful - such a scheme deserves to be so.

JimboMahoney 23 Oct 2009 , 8:52am

It's also worth noting that this isn't really £50,000 of TMF's money. It's raised purely from the membership fees of new members.

All of the membership invites I've received (4 since the 13th October!) indicate that there are about 500 places. You do the maths.

NiallA 28 Oct 2009 , 2:39pm

This may be a bit "out of left field" as it were, but can you possibly spread trade the picks?

Could start with a smaller bank....just a thought.

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