We got your submission -- thanks!

[NewspaperFool <fool at fool dot com>]

[Yes, this is a form letter (gasp!). But we update it and include a different feature article each week, in order to keep it fresh.]

[Has your local paper recently started carrying the Fool? If so, please send a note to SelenaM@fool.com and let her know which day of the week we're run. Thanks!]


Greetings!

THANKS! ...for entering The Motley Fool's trivia contest (or submitting a question for Ask the Fool or a Dumbest or Smartest Investment story). We're delighted you're reading us and hope that you'll continually find us informative, amusing, and helpful. Be assured that we *are* reading each submission and we try to reply to every one that needs a reply.

ABOUT OUR TRIVIA GAME: Yes, there really are prizes and winners -- one a week. If you win, we'll contact you directly before delivering your nifty prize of trifocal reading glasses. (Okay, okay, it's not that. Prizes are more likely to be ballcaps or t-shirts than waffle irons or giraffes.) You'll find the answer to each week's question in your newspaper the following week. FYI, at present we're receiving a few hundred entries for each week's contest; not everyone can win.

RECENT WINNERS: Jim Ruschman, Anne Horaczek, Kenneth Cooper, The Edwards Family, Tracy Carter, Ernie Granillo, David Seltzer, Gene, Carolyn Johnson, Margit Hashbarger, Ben Swatt, Richard Schmaltz, Bob McMillian, Karen Gloster, Don Zatyko, BikeBabe, Evelyn Richter, Genevieve Lasse and Andy Bracken.

IF YOU SENT IN A QUESTION: We regret that due to limited staffing, we can't answer individual questions. (We may possibly tackle yours in an upcoming newspaper feature, though, so feel free to send in questions any time.) Also, know that you're invited to ask your question of Tom and David Gardner, Fool co-founders, for The Motley Fool Radio Show on National Public Radio. Call toll-free anytime at 866-NPR-FOOL -- maybe your question will end up answered on the air!

To get an answer, try posting your question on our "Ask a Foolish Question" discussion board at: http://boards.fool.com/Messages.asp?bid=100000.

We also have many other boards on lots of topics at: http://boards.fool.com. You might find a better place to ask a question there, or perhaps you'll stumble upon answers without having to ask!

WELCOME -- AND PLEASE VISIT OUR WEBSITE: There's a lot waiting for you at http://www.fool.com (on AOL, keyword: Fool), including many (free!) articles and collections of information on personal finance and investing, our Fool's School, and interactive discussion boards (where folks are discussing many companies and investing approaches).
A history of our company: http://www.fool.com/Press/history.htm
Take a tour of the site at: http://www.fool.com/about/site/tour.htm

RECENT TRIVIA WINNERS: Keith Olson, Dina Vann, Richard Weaver, Kim Reynolds, Douglas Moore, Mike Mihalov, Alta Parsons, Herman Meyer, Betty Whitehead, Vincent Hawley, Nathan Leshner, LaFleur, Ronnie Lerman, C.H. Fitch, Richelle Kane, Bill Hall, VJK848, Ric Hammond, Bill Geiler, Lue Davis, Brian Speer, Douglas Beck, Loren Lohman, Gail Cooley. Congrats to all!

WHAT WE'VE GOT FOR YOU THIS WEEK:

Below, after some other highlights, you'll find a special report by Jeff Fischer explaining why we should understand what we own.

ALSO OF NOTE THIS WEEK:

***Ready for War?Learn what you can do now to protect yourself and your financial future.
http://www.fool.com/news/foth/2002/foth020829.htm

***New! Our revised Credit Center! Learn how to be smart about your credit -- and check your credit rating: http://www.fool.com/ccc/check/index.htm

***New! A corner of Fooldom just for teenagers! Invite any young people you know to check it out -- you may help them become rish one day.
http://www.fool.com/teens

***Here are all our articles from the past week -- see which ones interest you most: http://www.fool.com/foolwatch/foolwatch.htm

***Check out our personal finance center, featuring newly-revised insurance information, sas well as money-saving tips on many aspects of your life: http://www.fool.com/pf.htm

***Our mutual fund area explains how mutual funds work and discusses what we think is the most compelling fund out there. Check it out: http://www.fool.com/school/mutualfunds/mutualfunds.htm

***Take a quick tour of all the Fool has to offer. You're sure to discover some helpful information: http://www.fool.com/Specials/2002/02041000sp.htm

***Join the Fool (it's free!): Help us serve you better, and get some nifty freebies and special deals: http://register.fool.com.

***Get research reports on at least three promising stock ideas each month, with "The Motley Fool Select" -- our research publication. Learn more: http://www.fool.com/Specials/2001/Specials05222001.htm

***Our Discount Broker Center is where you can learn how to select a brokerage. We've got answers to frequently asked questions there, and more. You can even open an account through there. Check it out!  http://brokerage.fool.com

FEEDBACK?: We welcome your feedback on our newspaper feature and this weekly autoreply. Mention which newspaper you read us in and send your note to: selenam@fool.com. We'd love to hear which items you find most valuable, which parts bore you, and any suggestions you might have.

Welcome to Fooldom!

Selena Maranjian (selenam@fool.com)


FEATURED FOOLISH TIDBIT:

Understand What You Own

By Jeff Fischer (TMF Jeff)
August 29, 2002

It's time for all of us to go back to school no matter what our investing level. At the Fool we believe your pants are never too fancy to benefit from a refresher course in the fundamentals of the investing game.

Tuesday, Matt Richey suggested the "index investing plus a few" was one way for busy investors to beat the market. Sounds good, but picking "the few" needs to be grounded in one of the most basic tenets of Foolish investing: understand what you own. Jeff Fischer reminds us how easy it is to forget.

It is bad, and it happens every day, all around the world. Not tawdry clandestine flirtations, but the purchasing of an investment without an understanding of the investment.

You've probably done it, or considered doing it. You received a phone call from an high-pressure stock broker. You received a hot tip that "can't miss" from a friend who has a history of tips. You received an e-mail promising riches if you just buy a penny stock.

And you considered it. Your mind pondered: What if? Maybe this one will really prove out. Maybe I should do it. Maybe.

Millions do it every year. They buy something they don't understand. A stock. A mutual fund. A real estate investment. And most of these investors get burned. Badly.

It isn't that you can't grow wealth by investing in such vehicles. Obviously you can. It's just that in most all cases, you need to understand what you're getting into -- study and truly understand it and why it should work out -- if you're going to have consistent success. Because if you can't understand and explain in simple terms why an investment should work out, it almost certainly will not.

If you're just buying something because someone told you that it will make you wealthy, you're stepping directly into folly. Nobody has a golden tongue. Nobody is so brilliant that they can share their best ideas and make everyone else rich. Consider full-service brokers purporting to have great ideas. If their investing ideas are so brilliant, why do they need to charge annual fees every which way from Sunday?

Understand what you own

I'll propose a simple equation:

Your Level of Understanding = Your Long-Term Investment Performance

The two sides of this equation rise and fall together. The greater your understanding of your investments, the greater your long-term investment performance is likely to be. I believe that this will prove true whether you choose to invest in real estate, stocks, bonds, ostrich farms, and so forth.

There are many reasons for this equation working. The greatest reason is this: If you don't buy anything until you have a skilled understanding of it, you're going to sidestep 95% of the bonehead mistakes that you'd make when buying investments without doing your homework beforehand.

Another reason: When you invest in something that you understand and are comfortable owning, you are much more likely to be comfortable riding out the inevitable hard times. Contrariwise, when you own an investment that makes you nervous for lack of understanding, you're much more likely to freak and sell it whenever the wind blows sour.

Don't follow the crowd, follow your mind

In May of 1999, the Fool's Boring Portfolio sold its shares of Cisco Systems (Nasdaq: CSCO) because Dale Wettlaufer, the portfolio's manager, couldn't see the value proposition behind the soaring stock or determine the long-term potential and competitive landscape of the technology. The sell report was well explained. However, he received flak for selling such a darling stock, one loved by thousands. That Cisco has fallen significantly since then is not material. That Dale hasn't suffered that fall while holding something that he didn't understand in the first place is.

Enron (NYSE: ENE) had plenty of buzz. The energy-trading company was worth more than $60 billion at its peak. I looked at it, but I couldn't get comfortable with the business. Now it's worth $0. How many investors bought Enron because it had an exciting aura surrounding it, but didn't do their homework to truly understand it? Many more piled into Lucent (NYSE: LU) for similarly suspect reasons ("it's popular!"), while lacking an understanding of the business.

We take at least several months to reach each buy decision for a reason: We must understand what we're buying and we must be comfortable with all aspects of ownership. Everyone understands different things. Warren Buffett understands insurance, candy and furniture retail, and similar businesses. His success is attributable to his not going outside of what he understands or is comfortable owning. Period. (Almost. He's also a smart, humble guy.) By buying only what he understands, he can buy at good prices and earn a strong return.

All right already. Enough words of caution. Now you just want to know how it's done or remind yourself of the right way to do it. Our Choosing Stocks With The Motley Fool online seminar (http://www.fool.com/Landing/seminars/choosing_b.htm) will take you through the steps of how to understand a company. It will even help you identify high-quality companies and make sense of those darned financial statements. If you're looking for the most convenient way to tap into a steady stream of new stock ideas, this online seminar ($49 for eight lessons) walks you through the entire stock-picking process

Remember, your level of understanding leads to your long-term investment performance. Know your mission. Know your strategy. Know your investments.

(c) Copyright 2002, The Motley Fool. All rights reserved. This material is for personal use only. Republication and redissemination, including posting to news groups, is expressly prohibited without the prior written consent of The Motley Fool.