We have the final chapter of the Interest Rate-Gate saga, take a look at Telstra Corporation’s (ASX: TLS) first half results, and show how The Motley Fool stands accountable for its sharemarket recommendations.

Well, I’ve received hundreds, maybe over a thousand, emails after owning up to my mea culpa on my bodged interest rate call.

By far the majority were positive, and supportive. Thank you to everyone who replied. Below we have a fuller selection of the feedback.

Here is one of my favourites, for obvious reasons…

“I love the way you got your own back and took the p*^s out of yourself with no more predictions. Haha!! Apart from receiving your exceptional advice, it’s also great entertainment. Well done and keep up the great work as all your and Dean’s predictions are going great guns for me in my portfolio. A big thank you to you both.”

It was not all glowing, however…

“The trouble with all analysts and ‘predictors’ is that they won’t back down.  The Reserve Bank looks at it long Bruce – macro Bruce, not short sighted like most analysts. We are all part of the world, Europe plays a part in all of this, even though you might not think that far out or that far away!! It’s like Motley Fool’s QBE recommendation! Got it wrong as one of the 4 stocks for 2012, but still can’t admit it’s probably a really bad call! Your articles are interesting breakfast reading, but I’d ever take them too seriously. You’re way too confident that you’re RIGHT!!!”

Yes. I was way too confident I was right with my interest rate prediction. The egg has well and truly covered my face.

But, if there’s one (other) thing I’ve learnt in almost 25 years of active investing, it’s to be humble. You can never be right all of the time. If you expect to be, you’re in for rude, expensive shock.

What the sharemarket giveth in good times, it can taketh in the blink of an eye…whether that be through a shock profit warning from Billabong International Limited (ASX: BBG) or a literally a tsunami, like the one that hit Japan and uranium companies like Energy Resources of Australia Limited  (ASX: ERA) and Bannerman Resources Limited  (ASX: BMN).

There are no guarantees in investing. At its most basic, it’s a risk versus reward equation. You invest your money, with the hope and expectation of it appreciating, over time.

Swing for the fences…and strike out

If you get is right, you can make many times your initial investment. But there is always a risk of capital loss. Risk versus reward.

Here at The Motley Fool, we focus on both. We look at the upside potential, and also the downside.

Many investors swing for the fences, hoping to hit massive home runs. Many advice services recommend highly speculative small caps, many of whom will never turn a profit.

The two most important rules of investing

Boring as it may seem to the all too many speculators and get-rich-quick merchants out there, we subscribe to Warren Buffett’s two rules of investing…

Rule Number 1: Never lose money

Rule Number 2: Never forget rule 1

That said, we’re not afraid to play in the small company field. In fact, we prefer it, because it’s there private investors like you and I can find overlooked, unloved hidden gems.

But we do avoid what we call ‘story stocks’.

You know the companies. They usually have got nothing going for them…apart from a great story.

“If only that one (impossibly unlikely) thing happens, this thing will rocket to the moon.”

We’ll let you into a little secret…most times, the impossible never happens. Most times, the best you can do is to get out before it’s too late.

But most don’t. They hang onto their losses, vowing to sell them when they get back to break-even. Most times, they don’t.

And here’s another thing we don’t do…

I had a call from Peter. He told me he’d received advice from another newsletter service recommending he buy shares in a company because it is a takeover prospect.

For all the rumours of takeovers, very few ever happen. Buying shares because the company might be taken over is no way to invest.

Remember Woodside Petroleum (ASX: WPL) long rumoured to be taken over by BHP Billiton (ASX: BHP)? Last time I looked, it was still an independent company.

Last year, Goldman Sach’s did some modelling, thinking the industrial stocks most likely to become takeover targets were Leighton Holdings (ASX: LEI), Downer EDI (ASX: DOW), Perpetual (ASX: PPT), Myer Holdings (ASX: MYR), Treasury Wine Estates (ASX: TWE) and Ten Network (ASX: TEN).

Not much doing there, so far…

Successful investing requires skill, humility and patience. Picking the next takeover stock takes none of those qualities.

Part of the humility is admitting to your mistakes, like a bad interest rate call, or a bad call on QBE Insurance (ASX: QBE) in our 4 Stocks for 2012 article, as highlighted by our reader above.

Accountability is something The Motley Fool takes very seriously. We live or die by our recommendations. Too many bad calls, and we won’t have too many readers and subscribers. Fair enough too.

It’s something our CEO and co-founder Tom Gardner touched on in the video he and his brother David Gardner produced to introduce Motley Fool Share Advisor to Australia.

About 3 minutes in, Tom says…

“We try to make sure you get the education and the insights…and really understand what you’re doing month in and month out AND be able to hold our advice accountable. That’s a key thing at The Motley Fool. We track all our returns against the market and we’re totally transparent in our online community.”

Click here to view the video. It’s a little out of date now, but I guarantee you’ll learn something from listening to these two great people, and two incredibly successful investors.

Telstra – Still on track
You’ve probably heard enough of me over the past few days, so I’ll retreat back into my investing bunker and focus on searching for undervalued, overlooked, cheap shares.

Speaking of which, I’ve recently posted some brief thoughts on Telstra Corporation’s (ASX: TLS) first half results, released today.

Long-time readers will know that back in August last year, when the shares were trading around $2.90, Motley Fool Investment Analyst Dean Morel named Telstra as his number one ASX 20 pick for the long term.

Since then, Telstra shares have risen almost 14 per cent, plus investors pocketed a 14 cent dividend, versus a flat S&P/ASX 200 Index.

Today, Telstra trades on a fully franked net dividend yield of 8.3 per cent. There are many worse investment opportunities.

Final Foolish Thoughts

And finally, in the spirit of accountability, it would be remiss of me not to update readers on the performance to date of aforementioned 4 stocks for 2012 from January 6 2012 to date…

QBE Insurance: (7.6%)

Coca Cola Amatil (ASX: CCL): (1.8%)

Westfield Group (ASX: WDC): 6.5% (including dividend)

Telstra: 0.0%

S&P/ASX 200 Index: 3.3%

Sure, it’s not a good start, over the period of one whole month. But perhaps, when looked at as a portfolio, it’s not quite the disaster some might have us believe.

And in any case, especially in regards to QBE, as Motley Fool Share Advisor readers will know, with the shares now trading at around $12, down from over $30 in 2007, the future may be more promising than the past.

Thanks, as ever, for your support. Selected reader feedback follows…

Bruce Jackson has an interest in BHP and TLS. The Motley Fool has an interest in disclosure.

My respect for you has grown immensely since you published the negative comments below. It takes courage to do that. I only wish that politicians would do the same. It just goes to show you that the show is not over until the fat lady sings. Well done, mate.

Some of your subscribers need to take a chill pill and get a grip. So, you made a prediction and it wasn’t correct? Big deal. I couldn’t be happier with what you’re providing. I love the humour. Personally I’d much rather a newsletter with humour that doesn’t hide behind the odd wrong call. Better this than the usual newsletters, with more stiffness than porn stars on Viagra. Keep it going Squire.

GO BRUCE! … I’m still rootin for ya! … F$$$ the interest rates!

So far, I’m enjoying the weekly Share Advisor newsletters and of course the monthly PDF. I’m extremely excited about the ideas presented in these communications from you and then do my own research on the stocks mentioned. I want to let you know that we’re not all uneducated “idiots” who take great pleasure in kicking someone when they make a call that turns out to be incorrect. Big deal, it’ll happen again in the future too. Here’s to a successful and foolish future.

Prediction is not easy when you have people that are not involved in the real world. You would better to try reading tea leaves! Just give a couple of good shares to invest in.

Please do not send any more up dates to this email address.

I can’t believe people got their knickers in such a knot. Very uptight I would say. No drama here. You are allowed to predict. And you were wrong. So what!!?? Anyhow, their reactions you printed provided an entertaining read…

Your newsletters have been a great and entertaining read, not to mention the valuable recommendations that have all paid off so far. Glad that the Motley Fool has truly arrived down under.

When I read your throw-away line about interest rates, my subconscious editor blinked red momentarily and flashed “Doesn’t this this guy practice what he preaches?” And suddenly, “Bing!” Your reputation suffers damage you can’t imagine. Your advice is very good, built on a steadfast basis. Save some of it for yourself.

PLEASE UNSUBSCRIBE ME FROM THIS NONSENSE……….

I’m sure you have thick skin, you would need it with your public profile, but please don’t stop educating and amusing and enriching us. And I’m really sorry for the insulting emails that have been sent by fellow investors, I’m actually horrified by it.

Just to let you know I for one am perfectly happy with your advice and have subscribed.

I was very impressed by your openness in publishing the emails you got rubbishing your (ill-advised) prediction. That is the sort of openness I want in an advisor – someone who self reflects and is not full of hubris. Keep up the good work on the companies, forget the astrology and you won’t lose many subscribers.

I’m not a subscriber, but anyone who hopped into you for making a prediction re interest rates is a bit narrow minded (in my view). You keep sending me your free commentaries…I’ll keep reading them.

Stick to finding great businesses at great prices, instead of following the crowd on crystal ball gazing macro economic predictions.

Best bang for me buck since subscribing. Actually smiling. Wow to the relay of whinges and the balls to print ‘em. Keep it up. Like as if any fool would’ve made a move solely on your article when every man and his dog was predicting the same thing.

You have to be joking. You have balls to send this and also ask for money.

Amusing.

When you get it right people think you are great & when wrong they want to throw rocks at you. It was a fair call & as you said in the scheme of things doesn’t make much difference. For what it’s worth I think you guys are doing a great job & I will continue to subscribe as your advice is still first class.

Love your honesty and ability to take the heat when needed. Keep up the good work.

You guys are doing ok – most of ya stock recommendations have done pretty good. Thanks. If ya got everything 100% right I would know that you were doing something terribly wrong !!!!

Keep up the good work and please don’t hand over the job to some “pump and dump” merchant like the last Advisory Letter I was subscribed to!

I’ll stick with you guys. Can anyone be sure the RBA is right on this at this time anyway? I’m out in the suburbs and hurting.

Your study of sound companies and recommendations is all I want not second guessing the RBA.

Just FYI – Glenn Stevens lives in Sylvania (approx. 26 kms from the RBA’s office in Martin Place) and has lived in the Sutherland Shire for most of his life. He knows what is going on in the Burbs.

Chin up Bruce. Personally, I enjoy your emails and received your Share Adviser information. I consider your advice before making up my own mind. Yesterday I did not rush out and do anything drastic based on your rates prediction. What’s the big deal here, am I missing something? I too occasionally make mistakes. It seems some of your readers never have. Nobody’s perfect but hey, the world did not end. I say predict away!!!

I don’t think you’re a f**kwit, but you have to admit it was a dumb and spectacularly huge blooper all the same. I guess the reality of ‘economic forecasting’ is that it is an inexact science and not even the ‘best’ economists get it right all the time (or even most of the time). Congratulations on getting a mea culpa out there quickly, best PR advice anyone could’ve given you. I’ve followed the Motley Fool since about 1980 and most of the time you make eminent sense.

Well now I am famous.  My quote made it to the Motley Fool website or daily email anyway. As quick as I was to drop the boot yesterday, respect for taking it on the chin today.

Instead of wringing your hands about the prediction error on the RBA rate decision what about telling us how you arrived at the conclusion you did. That would be much more interesting than reading your lines.

Well I am glad you are honest about errors and don’t try to cover them up like others do – can’t get things right all the time.

Keep up the great information that is so rare to find from you guys and always stay out side the square and stay positive instead of gloom and doom from all who wish to stay in the shelter of the box.

Take heart guys. Even the best of us can occasionally get it wrong. If it were up to Bob Katter he would drop the rates by 2% to lower the dollar that is strangling our exporters.

I think your newsletters are very entertaining.

It’s a pity you never pointed out to the knockers that they’re going to spend most of their lives disappointed if they expect anyone to be right 100% of the time. Or perhaps they get around that by never actually doing anything themselves? Seems unlikely your words would have any affect on them anyway. As for the claims that things are so bad now, has everyone forgotten the recession of the early 90’s? That was something to complain about. Apparently household disposable income is now higher than ever. People just like to complain, and, as you say, life goes on.

OUR #1 DIVIDEND PICK FOR 2016...

Forget BHP and Woolworths. This "dirt cheap" company is growing like gangbusters, and trading on a 5.6% dividend yield, FULLY FRANKED (8% gross). With interest rates set to stay at these low levels for years to come, for hungry investors, including SMSFs, this ASX company could be the "holy grail" of dividend plays for 2016.

Enter your email below to discover the name, code and a full investment analysis in our brand-new FREE report, “The Motley Fool’s Top Dividend Stock for 2016.”

By clicking this button, you agree to our Terms of Service and Privacy Policy. We will use your email address only to keep you informed about updates to our website and about other products and services we think might interest you. You can unsubscribe from Take Stock at anytime. Please refer to our https://www.fool.com.au/financial-services-guide">Financial Services Guide (FSG) for more information.