ALEXANDRIA, VA (Feb. 2, 1998) --
Delays have dangerous ends.
Good evening, Fools.
The Cash-King portfolio delivers its second intent-to-buy announcement today, officially welcoming Pfizer (NYSE: PFE) into the fold (read the Pfizer Buy Report). Seeing as the author of today's report is carrying the middle name "Murphy", how fitting is it that Pfizer rose $1 per share to $82 3/4 in advance of our report? Adding insult to injury, Microsoft (Nasdaq: MSFT) rose $5 to $154 today... and we haven't executed our MSFT trade yet. Ouch!
A bit of context, Fools.
Originally, it was our intent to launch this portfolio on January 1st. But the inconveniences of modern living ran interference. Foolishness had David and me racing off on a book tour through January -- during which I had an opportunity to meet some extraordinary people, from physicians to four-generation families, from 16-year-old C++ programmers to 52-year-old investment bankers, from all-women investment clubs to a Fool in Whitefish, MT who drove all the way to Seattle to hang with dozens of investors for an evening.
Ah, but the end result of that trip across America and all that fun was that the Cash-King portfolio sat idling on the runway of market-beating growth until its launch last week. You can't imagine the stomach-burning anguish this has introduced to the lives of my portfolio-building cronies: Rob Landley (Web name: Oak), Phil Weiss (Web name: MrShihTzu), and Al Levit (Web name: CashKingAl). Beginning next Monday, each of them will take their weekly turn at writing these daily reports, and I'm expecting to get skewered for going on that book tour, for causing this delay.
Rather than sit back on the ropes and prepare for their punches, though, I'm going to pre-empt 'em by hitting myself. Here's the past one-month performance of the first two companies being added to the CK portfolio:
1/1/98 2/2/98 Change Microsoft $131 $154 + 17.6% Pfizer $75 $83 + 10.7%
In other words, during the four-week delay, our two stocks had what on par amounts to market-beating years. Ahh... Murphy! But this unfortunate growth can be used to serve a purpose. I'll use it to sound a gentle reminder to Fools following this portfolio.
Our account may go nowhere for a year now.
We may have just witnessed the exhaustion of the short-term growth potential of CK stocks. Further, maybe our stocks won't go anywhere for two years. Heck, even five. In fact, I'm open to the idea that the twelve stocks in our portfolio might offer up a mere 3% annual growth over the next ten years, inching forward alongside a disappointing performance by U.S. stocks.
Yet, this won't stop us from methodically adding $2,000 every six months to this initial $20,000 account. And we'll continue to deposit it into what we believe are superior companies in sustainably-thriving industries. While we believe that the software and pharmaceuticals industries are light enough, expansive and expandable enough to provide market-beating growth for a long time to come, we'll have to keep learning about them in the years ahead. And while we think we've selected two of the premiere (if not the two premiere) companies in these industries, we'll have to continue digging through Microsoft and Pfizer's quarterly balance sheets and watching their product mix evolve to improve our chances of success.
So, I'll close with the lesson for today, and it is Shakespeare's: "Delays have dangerous ends." We've delayed long enough. We have decades more to