I have a five-year-old daughter. She has a Barbie. And today I was thinking we could probably have some fun making some clothes for her Barbie. It would be just like the fun I had building models. That's when it hit me; the Foolish approach to investing is just like building model airplanes. Just about everyone has experienced the joy of model building. As a boy I spent hours studying assembly instructions, cutting parts off of sprue, gluing and painting plastic models of planes, tanks, and automobiles. What's that you say? You never built models because your mother wouldn't let you have airplane glue? Or as a girl you were never really interested in that? Well, if you ever had a toy that you had to put together, or a doll to make clothes for, you were building a model. A simplified, easily understood representation of a real-world object. And by putting it together yourself, you had the opportunity to learn a little about how it worked. Fooldom has a great deal of fun building models. A Fool recognizes the folly in giving or receiving only an answer (Is stock XYZ a good buy? Wise Answer: Yes!). Therefore, a Fool will usually refer to an established model in order to answer a question: based on the company's financial ratios, how the company relates to its industry, and what the future holds for the company, a Foolish recommendation can be made whether the is a good or bad investment. Part of a Foolish education is putting together financial models about how companies generate profits, investment strategies, and retirement plans. In the process a Fool gains more and more detailed understanding of how these things work in the real world. And just like
with plastic models, a Fool has a choice between already assembled, snap together, intermediate, and advanced models to assemble. The Foolish emphasis is on having fun, gaining some understanding, and being proud of your own accomplishments. So whether you are a Fool ready to snap together a Foolish Four portfolio, or sew up a Barbie Dream Retirement, remember it can be a great deal of fun building a model and you just might learn something.