‘The Independence Fund’ - A Mutual Fund for Motely Fool’s.

A bunch of questions come to mind:

1. Why now?

2. Why ever?

I have posed the question to a few trusted sources and the general consensus is:

Its a bad idea. It won’t work. They should stick to what they do because its hard to disprove.

There is a very good reason Cramer does not run a mutual fund. No matter how much we try and analyze Cramer and Motley Fool returns…you can’t pin it down.

That will change now.

The Gardner’s are smart dudes no doubt and have 200,000 subscribers so SHOULD be PRINTING money. They get 4 million uniques a month to their website. I know this because that information is in their cold e-mail pitch to me. It seems they are betting a big part of the franchise on now beating the S&P.

Here is some information on their new fund (from their e-mail to me):

For one thing, Motley Fool Independence Fund is a no-load fund. That means you never pay an up-front sales charge or commission to invest. You don’t pay so-called 12b-1 fees to help us market the fund, either. Of course, you will pay for the fund’s operating expenses, which are estimated to equal 2.30% of the fund’s assets over the first year of operations. However, the fund’s investment advisor will waive its fees or reimburse fund expenses to keep the annual expense ratio at 1.35% until at least March 31, 2010.

Also, to keep the fund’s expenses low, we discourage small accounts and short-term trading by assessing a $24 annual fee on accounts of less than $10,000 in value, as well as a 2.00% redemption fee on shares redeemed within 90 days of purchase.

And unlike too many U.S. mutual funds, which typically hold a stock for less than one year, we intend to be long-term, buy-and-hold investors at heart. And there’s one more thing …
Did we mention we get paid more for
beating the market?

And when we don’t outperform our benchmark, we make less. That’s because we’ve opted for an unusual compensation model that allows our fees to increase or decrease depending on the fund’s performance.

In the industry, we call this a “fulcrum fee” structure. You can learn more about how it works by reading the Motley Fool Independence Fund’s prospectus.

This unusual component of our fee structure gives your manager an incentive to earn the highest possible return relative to the market, not merely pump up the fund’s assets the way most other funds do.

Just as important, your portfolio manager, Bill Mann, is a meaningful shareholder in the fund. He’s investing right along with you. And here’s something else: The Motley Fool has $1 million of its own money invested in Motley Fool Independence Fund.

So, you see, our interests really are aligned with yours, in more ways than one.

With ad sales down and subscribers believing that all content on the web should be free, The Motley Fool has had to go somewhere they never really wanted too…shlocking mutual funds.

To me, it is dangerous way to leverage their 200,000 strong subscriber base. Long term, it’s a lose/lose decision. The subscribers invest, it underperforms and they cancel their subscription. Of course, it could blow away the averages as well. If so…they get bragging rights, something I though Motley Fool never cared about.

Tough Times are making leaders do some strange things.

Michael Jackson, Bernie Madoff, Goldman Sachs, AIG, GM, Twitter and now Sarah Palin have outheadlined the rest of the world’s pain and suffering.

No matter what you say about Michael Jackson, there is little disputing the $500 million or so he left us in debt.

Bernie Madoff has left us with $20 plus billion mess and though he may be locked up for 150,000 years, he can still tweet .

Goldman Sachs $GS is being labeled the devil by Rolling Stone Magazine and if it was not for the dummy corporation that is AIG, Goldman could be in a lot more than a media and image fight.

Nobody seems interested in knowing what really brought $AIG and the rest of the American Financial to it’s knees except Michael Lewis, in this recent must read piece .

America’s most talked about companies are the BROKE ($GM) and the REVENUELESS (Twitter).

It’s ok though, because our business television nitwits at CNBC are yapping about hope and green shoots. They have our backs.

Please don’t get me wrong. We all can make a difference, I love America and this post is looking at the news from 10,000 feet.

That said, 2009 is off to a pathetic start.

To continue our amazing freedoms, we need to ask better questions and demand some of our basic rights back. Most important we better start picking up after ourselves.

Robert has interviewed pretty much everybody in the social web space and it’s nice to hear he likes the business we are building at Stocktwits.

Phil on the other hand laughs and sends me three more that if ungoverned would get us thrown off Twitter.

I am not a Sun Tzu guy. I am a lover, not a fighter .

A huge majority of the great businesses since the beginning of time have likely benefitted from Sun Tzu style and tactics.

My question though is this…In the day of the Social Web and now microniche communities, is Sun Tzu thinking a hindrance?

Take this Sun Tzu quote:

“What the enemy doesn’t know about, they can’t fight.”

If your enemy is kept in the dark these days, it’s likely your community and potential customers won’t know either.

I hate spam and I don’t think Twitter is even close to dealing with the issue. I wonder if they even care some times. All I think about is spam. The problem of Twitter as a platform is defining all the boundaries of spam.

At Stocktwits, the team and core community have pretty much decided what we think is spam and we want to do everything we can to stop it.

Therefore, do we let everyone know we hate it and are implementing ways to beat it down or do you keep your mouths shut because if the spammers know you are implementing the filters, they will try harder to beat it?

Love to hear everyone’s thoughts….

I believe Stocktwits goal of becoming ‘The Social Bloomberg’ is ambitious, fun and closer to a reality every day as traders build on top of the technology tools at their fingertips today.

We have had the early hedgie and quant adopters eavesdropping mostly, but a few participating on Stocktwits .

Since 2006 I have been banging the table about real time financial information from trusted sources. I am happy that my gut instincts are starting to attract mainstream financial acceptance.

With 16,000 analysts out of work the last few years and so few likely to find their way back into the banking world as it existed pre 2007, our heads at Stocktwits are spinning with feature sets that will match research and customers in real time.

I am not a huge sentiment fan as I would rather follow the best traders in and out of trades than worry what the community is doing as a whole. But as we get smarter at discovery and filtering, some fantastic algorithms will be developed and we are already working towards these products.

Look out above.

I have long said that Social Leverage is the NEW Financial Leverage. My mistake is that thinking there was no downside to Social Leverage…that it was infinitely scalable. I stand corrected.

I have recently realized that there are indeed boundaries and limits to Social Leverage and the big one is time. I am overcommited and I am underdelivering.

It is nobody’s fault but mine.

I need to reintroduce NO to my vocabulary. I have been drunk on YES.

Using the word NO sucks, but it is powerful.

The best investors say NO all the time and time there YES’s when the chips are all stacked in their favor.

Back to the drawing board once again…

Months later, when talk of ‘high noise’, ‘low engagement’, ’spam’ and ‘low retention’ are the buzzwords surrounding Twitter, the Stocktwits community is thriving around all these trouble points and battling the SPAM problem head on 24 hours a day. Stocktwits continues to make Twitter better and Stocktwits is very useful for individuals that have an interest in stocks, currencies and the global markets.

I personally get great customer service at Twitter for the few times I have needed it, but Twitter’s failure to add Stocktwits to the recommended list after all this time and success building an engaged and helpful community is just dumb on Twitter’s behalf. Our larger media competitors have resorted to spamming hashtagged words and dumbing down the whole search process, which hurts EVERYBODY trying to get discovered and hurts search most of all.

Here is my short speech about ‘Living in a Twitter/Finance World’ from the 140 Conference . It seems like we are being recognized by everybody but the old media that ’says’ they are embracing it (for that we are actually grateful) and Twitter itself.

As for Twitter?…wake up!

All lists are biased, but yours is just lazy and dumb for the most part. I am fine with you promoting poker, but let’s stretch the list a little to the great Stocktwits community.

If you agree with me, please let @biz and @ev know what we are doing over at Stocktwits. Our work is surely not the basis for Conan O’Brien’s ‘Twitter Tracker’ spoofs:

On Stocktwits TV we will focus on our ‘Human Ticker’ that carries real ideas, from real people in real time. It should be fun to analyze trades and ideas as they come through plus questions from the community.

I am open to all ideas and data that we should be presenting, but mainly it will be banter amongst real traders and a lot of dead air.

In essence, Stocktwits TV is a work in progress where the community is the host.

I hope you keep sharing your ideas in the comments…

This morning I had an in depth interview from a fellow stocktwit and it was a lot of fun. Of course I got asked about the key aspect of being a successful entrepreneur or some key insights.

I am not sure how to define entrepreneur and maybe I am getting better, but I sure wish I was younger. Young people just make great entrepreneurs. Of course you can get better with age, but you can always hire wisdom. Lack of fear and responsibility are just too important. Entrepreneurs are selfish. They have to be. It’s easier to be selfish if you are younger.

The best BUSINESS I ever was a part of was Pro-Innovative Concepts and by all measures we had NO clue what we were doing. We had a fantastic product , had some luck and than we made EVERY mistake in the book. Because we were young it was a freaking blast the whole way through. The business is still around today almost 15 years later.

Making the laundry list of mistakes we made 15 years ago would not be a blast today. I am just too old and surly.

I like to use the game of RISK as an example when I am talking about or to entrepreneurs starting their businesses. Monopoly and Risk are by miles the best board games ever invented. I love paying Monopoly with the kids and look forward to really getting into Risk with them.

I think the way to spot a budding entrepreneur is to watch them play Risk and/or Monopoly. The entrepreneurs keep the integrity of the game but change the rules, sometimes drastically.

The lawyers and accountants READ the rules and make you play by them.

I have played the game of risk hundreds of times and have never won from starting in Europe. I generally pile into a few corners of the globe and work my way out while everyone kills themselves in Europe and Asia…much like real life.

There are only a few Michael Dell’s and Bill Gate’s. The rest of us have to pick our battles.

As big and broad as Facebook is today, it started out as a niche social network. Today, Facebook is in the center of the map and has to fend off everyone with ambition.

Think about the game of Risk as you start your business. You don’t have to be all things to all people. Solve a problem and do it better than everyone else. Make sure you have a passion for what you are selling because it is just damn hard and 99.9 percent of the time takes more money and more time than you ever imagined.