Behind the Scenes with Motley Fool Share Advisor

April 2013

Share Advisor

Motley Fool Share Advisor...

Here to help individual investors learn how to find market-beating companies.
Nate Weisshaar, Share Advisor Analyst.
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Its Ugly Out There...

Your hard-earned savings arent growing in the bank. Rates on bonds and gilts are at record lows. Economic growth is stagnant, meaning picking the right shares to invest in is more important than ever. We favour the stock market for its long-term wealth-building potential and the sooner you take advantage, the sooner you could prosper.

And were here to help you every step of the way...

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We Believe We Can Help...

The Motley Fool is ready to lend you a helping hand with our market-beating investment newsletter Motley Fool Share Advisor.1 Our 4-person team of expert analysts are standing by, ready to help you harness the potentially superior returns offered by the stock market. This Zero Guesswork Approach makes it easy for you to take control of your own finances and do MORE with the money youve got in as little as minutes a month.

1. Full details of Motley Fool Share Advisors current performance can be found on page 15 of this guidebook.

Motley Fool Share Advisor

What You Will See At Motley Fool Share Advisor

FOUR smart analysts, working tirelessly to identify the best investment opportunities for you, using a relentless, proven strategy. Clear, easy-to-follow BUY recommendations, written in plain English. Ongoing coverage for every share that weve recommended, giving you complete peace of mind. Full transparency the performance of every share recommendation is tracked on our scorecard. Great educational content designed to help you become a better investor.
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And What You Wont See

Penny shares, get-rich-quick schemes and speculative punts. Were looking to buy quality businesses, with decent fundamentals that will stand the test of time. Spread-betting, day trading and timing the market. No, we dont have a crystal ball, and no, we dont go in for rapid-fire trading and racking up trading costs. Were looking for businesses that we can buy and hold for years. The world and his wife. Share Advisor is a premium, members only advisory service, so you can be confident that youre joining an exclusive community of like-minded investors.
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Share Picks That Work For YOU

Every month at Motley Fool Share Advisor, our analysts scour the market to find the TWO best shares to BUY. Whether youre after income or growth weve got shares that fit your style

...or as we like to call them at Share Advisor

ICE

FIRE

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If Youre An Income Investor...

then youll be instinctively drawn to the Ice side of the Share Advisor scorecard with its steady flow of income through generally slowermoving but more stable investments. Share Advisors Ice picks are companies that have shown consistent financial performance and growing dividends, and we seek to beat the market with a mix of regular dividend income and steadily rising share prices. And while these qualities are most commonly found in established firms, our analysts frequently go beyond the usual FTSE 100 suspects to bring you the best investment opportunities for your money.
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ICE

If Youre After More Growth...

then the Fire side of the Share Advisor scorecard will grab your attention with its potential for higher returns. In return for shouldering greater risk and share price volatility, we expect our Fire picks to steadily increase in value for us over time. Fire investing is not gambling or a get-rich-quick scheme, though our investing time horizon for these shares is measured in years and decades, not weeks and months. Were aiming to be long-term owners of these businesses and to reap the rewards from their success.
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FIRE

Putting It All Together

We recommend combining our Ice and Fire strategies to get the most from your Share Advisor experience. How much of each is up to you. A quick glance at our scorecards easy-to-follow Buy, Hold and Sell labels shows you our up-to-the-minute guidance on each share weve recommended. Buy Hold Sell Plus, two further labels Core Shares and Best Buys Now highlight for you the very best opportunities on the scorecard. Core
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Now
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CORE Shares
Put simply, Core Shares are the companies that we believe in the most at Motley Fool Share Advisor. We think these companies have growth opportunities that extend five years or more, excellent management teams, strong financial positions, and businesses that are easy to understand. Theyre also the companies we consider to be the best fit for long-term investors to own perfect for forming the foundation of your portfolio. Core

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Best Buys NOW

Every month, we review the scorecard and highlight the share picks that we think are especially good investment opportunities for your money right now. Youll see these shares labelled as Best Buys Now. Aside from the two latest picks weve made that month, Best Buys Now shares are the companies we recommend you purchase first, ahead of any others shares rated as a Buy on our scorecard. Now
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Meet Your Share Advisor Team pt.1

Nate Weisshaar is a senior analyst on the Fools global equities research team. Specialising in UK and European companies, his investing interests include banks and other financial companies. He is also a qualified Chartered Financial Analyst (CFA). Nathan Parmelee is the most senior member of the Motley Fools global equities research team. His areas of expertise includes companies with global growth potential, consumer focused businesses and special situations.
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Meet Your Share Advisor Team pt.2

Charly Travers is a specialist in buying cheap shares that have temporarily fallen out of favour. He has been Associate Advisor with the US Motley Fool Million Dollar Portfolio service since 2008. James Early is a former hedge fund analyst, writer and valuation expert. Hes especially fond of highyielding companies and has been at the helm of the US dividend-focused Motley Fool Income Investor newsletter since 2006.
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Our Performance
Motley Fool Share Advisor Overall Ice Recommendations
(Income Shares)

Our Return 20.8% 16.5% 25.0%

FTSE All-Share 14.0% 14.2% 13.8%

Fire Recommendations
(Growth Shares)

14 of our 27 active recommendations are currently beating the market 21 of our 27 active recommendations are currently showing a positive return
Motley Fool Share Advisors returns are calculated using a time-weighted rate of return (TTWR) methodology that includes dividends reinvested and excludes trading costs. The FTSE All-Share returns include dividends reinvested. Returns are measured from the date of each recommendation to the close of trading on 31st March 2013. 2 recommendations per month have been made since 27th February 2012.

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How We Invest At Share Advisor

At Share Advisor we approach investing as fractional business owners we dont trade pieces of paper and we focus on fundamentals like profits and cash flow to make our decisions not charts, tea leaves, or magic eight-balls! To identify a great share, we dig into its financial history, its business culture, management integrity, the competitive landscape it operates in, and so on. Finally, we determine whether or not the shares current market price is a good price to pay.
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Case Study:
One Of Our Best Winners
Hargreaves Lansdown (LSE:HL) is a Bristol-based investment management firm that was founded in 1981 by two chartered accountants. The company operates one of the biggest fund supermarket platforms in the UK.

Decision To Buy
Hargreaves Lansdowns dominant market position and assetlight business model appear to provide a strong competitive advantage and impressive cash flows. But market concerns about impending regulations and apparent slowing growth sent the shares tumbling in August 2011. After reviewing the situation and assessing the risks, Hargreaves Lansdown was chosen as Share Advisors first Fire recommendation in February 2012.

Decision To Sell
Almost a year on, shares of Hargreaves Lansdown were up by over 60%.1 However, Share Advisor became concerned about the impact new regulation would have on the companys profitability. Given our belief in the increased risks to the business model, and the lofty valuation the market was giving Hargreaves Lansdown, we decided to sell our shares in February 2013.

1. Motley Fool Share Advisors returns are calculated using a time-weighted rate of return (TTWR) methodology that includes dividends reinvested and excludes trading costs. Returns for the Hargreaves Lansdown recommendation are measured from the 27/02/2012 to the close of trading on 04/02/2013 a 60.5% gain. Note: This example is intended as an illustration of our process, and is not necessarily a fair representation of the outcome achieved.

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The Benefits Of Membership pt.1

Our TWO Very Latest Share Recommendations, Every Month: Thats one income and one growth pick we consider to have superior money-making potential. Ongoing Coverage: We wont leave you guessing on any company weve recommended. Instead, youll receive easy-to-follow buy-hold-and-sell guidance for all of the active share picks in the service. Weekly Updates: Youll get all the important information you need to know about right away from buying and selling shares, to our analysis of specific developments.
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The Benefits Of Membership pt.2

Live Interactive Scorecard: We keep track of how all of the Share Advisor recommendations are performing relative to the FTSE All-Share Index. Discussion Boards: Talk with other members and learn more about each company youre invested in. Our analyst team is also on hand to answer any questions you may have about their active share recommendations. My Scorecard: Simply add any shares that you own or are interested in. Well track your performance for each position and deliver you relevant Foolish updates, articles, discussion board posts and more.
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3 Great Reasons You Can Join Us Today

Were a fully regulated investing service, we genuinely believe you can trust the recommendations that we make and the advice that we give giving you complete peace of mind. 30-Day Subscription Money Back Guarantee. If youre not bowled over by the service we provide, simply cancel at any time within your first 30 days and we will refund your subscription fee in full no questions asked. Special introductory offer join Share Advisor today for just 99 and save 50% off the regular 199 list price for your first year START NOW
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Risk Warning
The prices of all shares, and the income from them, can fall as well as rise. You run an extra risk of losing money when you buy shares in certain smaller companies including penny shares. There is a big difference between the buying price and the selling price of these shares. If you have to sell them immediately, you may get back much less than you paid for them. The price may change quickly, it may go down as well as up and you may not get back the full amount invested. It may be difficult to sell or realise the investment. You should not speculate using money you cannot afford to lose, or rely on dividend income for non-discretionary living expenses. Some securities may be traded in currencies other than sterling, and may also pay dividends in other currencies. Changes in rates of exchange may have an adverse effect on the value of these investments in sterling terms. You should also consult your stockbroker about any additional dealing or administrative charges. We have taken all reasonable care to ensure that all statements of fact and opinion contained in this publication are fair and accurate in all material aspects. Investors should seek appropriate professional advice from their stockbroker or other adviser if any points are unclear. This newsletter gives general advice only, and the investments mentioned may not necessarily be suitable for any individual.
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Share Advisor Is A Motley Fool Product

For all queries please email ShareAdvisor@Fool.co.uk Alternatively you can call us on 0207 462 4300 (Mon-Fri, 9am-5pm). Details of what subscribers may and may not do with the content of the Share Advisor service are stated in the Terms and Conditions. http://newsletters.fool.co.uk/1503/help/disclaimer.aspx Authorised by The McHattie Group, St Brandons 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 Conduct Authority.

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