Motley Fool, one of the analyst website you will find in Yahoo! Finance, shares its philosophy and advice on investment. It is a pretty good website for you to learn more about investment.

Fool’s 3 important investment philosophies are: 1) invest in small cap, cuz higher potential growth than large cap; 2) stay away from “hot” stocks and buy “dogs”; 3) buy stocks with high return of equity.

My investment philosophies are: 1st invest in monopoly or 1 with high competitive advantage in 1 particular sector; 2nd regardless of “hot” or “dog”, purchase the stock with at least 20% discount compare to intrinsic value; 3rd company with at least 10% growth, PEG ratio lower than 1 and return on equity around 15% or higher.

One of things I disagree with Fool’s are the comments they made on China Mobile (CHL). It said China Mobile was already a US$240B company (during Aug 07), there is NO WAY to grow further to $2.4T after 10 years, let’s buy small cap etc etc.

Bilibala: look at Bell Canada, with a market share of -25% in mobile and +50% in local phone in Canada, a population of less than 35 millions and worth $31B, then China Mobile, in theory, should potentially worth $1.8T (+75% market share in a country with 1300 millions population with no local phone business => $31B / 2 X 75 / 25 X 1300 / 35). My point is: by simply looking at companies’ size and make a conclusion about their growth potential and future development is absolutely foolish.

I agree that over the past 30 years, US small cap index return is higher than large cap index, but it is 100 times harder to search a good small company than a large one. Unless you diversify well enough and keep great disciple, you will have a high potential to have low return and high risk. For me, I am lazy; I prefer to pick an easy path.

Haha, I may be bias, cuz I hold too many China Mobile. Again, no matter what, Motley Fool is a pretty good website for you to learn more about investment, and it is good to know/learn about other views & opinions.