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Cash-King Port

The Cash King Portfolio has been renamed the Rule Maker Portfolio.

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11 Steps:
 1: Philosophy
 2: Mastering Finances
 3: Allocating Savings
 4: Finding Ideas
 5: Getting Information
 6: Cash-King Criteria
 7: QuaVa & Flow
 8: Ownership
 9: Putting It Together
10: Retirement
11: Getting Answers

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• Boring Port
• Drip Port
• Foolish Four Port
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Cash-King Portfolio Report
Thursday, February 05, 1998
by Tom Gardner (TomG@fool.com)

ALEXANDRIA, VA (Feb. 5, 1998) -- We haven't closed out our acquisition of T. Rowe Price yet. Why? Because I'm enjoying my brief stint as a daytrader here. After all, we'll be adding new money to the portfolio just twice a year, so these first eight CK stocks provide us our greatest condensed opportunity in the next twenty years to get in the pits and day-trade. So why rush it?

In seriousness, this morning I decided that I just wouldn't have the time today to make the trade and follow up with the administrative details (ensuring that we have all the numbers right for public release, that there aren't typos in the report, that the report is ready for release by early this evening). And that, Fools, is an important principle for Cash-King investors:

Don't act when you don't have the time to do it right.

It's actually a simple notion reinforced recently by an excellent book that I've been reading entitled Piloting Through Chaos by Julian Gresser, an international lawyer and former visiting Mitsubishi Professor at the Harvard Law School. Gresser's book about negotiation reminded me that when we act impatiently from a position of weakness -- due to fatigue, confusion, panic, et cetera -- we usually do so without integrity. And when that happens, we're not really moving forward, we're spinning sideways without the integrity (or security) of purpose.

It's a simple idea that does seem applicable throughout daily life. In financial matters, when we buy a new car, or insurance, or a house, the salesmen out there are too often -- certainly not always -- working to unsettle us, to rattle us from our position of integrity, of self-assured patience (the ideal quality of a buyer). We could sit around and whine about this, or we could act accordingly. Gresser's book, fashioned from his years representing American and European businesses in negotiations with Japanese companies, is all about taking the extra time to gain composure to ensure that we are enjoying ourselves and, in fact, moving forward when we do move, and to not let ourselves be easily disconnected from our rich collection of life's lessons.

Ok, why did I ramble on about that?!

Well, last night just before midnight, I was faced with the choice between getting some sleep or scrambling to pull together a Cash-King buy report. I was exhausted -- after a day of non-stop meetings, a televised interview, a few almost-met writing deadlines, then an hour on the ice preparing for the beginner's hockey season this spring (woo-hoo!), then dinner at a Mexican restaurant, followed by two hours trying to knock out e-mail for the day. Whooosh!

It was midnight; I was tired; my mind was tumbling over itself in a downhill roll. And I was in a bit of a panic, thinking that I'd be up working for another two hours only to wake up in the morning into another blinding blur of obligation. (Doesn't that sound like a Foolish life growing less so?) Quickly those extra two hours of sleep were becoming triply more important than racing to get a new stock report written. Triple that, even.

It became an easy decision.

Ladies and gentlemen, the Cash-King portfolio is not all about getting into our stocks tomorrow. Around 11:45 last night, I was forgetting that, but by midnight thankfully the principles had stampeded on my mind. This approach to investing is based upon a solid, long-term savings plan and the treatment of the stock market as a lifelong savings vehicle. If these companies we're buying truly are great, it won't matter if we buy them tomorrow morning, next week, in late April, or in June of 1999. That Foolish notion -- an unlikely thought in the investment world -- is what must drive our work in this column. And it will.

By staying up, through exhaustion, until 2 a.m. to work together a buy report, wouldn't I be undermining the most basic teachings of Cash-King investing? So last night, I decided that yes, I would. I thanked the author of the book I've been reading, snapped off the lights, and went to bed.

We'll probably buy our T. Rowe Price shares tomorrow. And we'll probably have our fourth buy report for you tomorrow evening. As we work to serve you over the next two decades and beyond, endurance becomes an incredibly important feature of all this. Given that, we recommend that, upon completion of this report, you shut down your computer and give yourself at least an hour of what might be called irresponsible nonsense.

We'll meet back here in a day.

Fool on!

Tom Gardner (TomG@fool.com)


TODAY'S NUMBERS
Stock  Change    Bid 
 ---------------- 
 MSFT  -1 7/16  155.38 
 PFE   -1 5/8   79.75 
 

                   Day   Month    Year  History 
         C-K      -0.27%  -0.35%  -0.35%  -0.35% 
         S&P:     -0.33%   2.37%   3.41%   0.22% 
         NASDAQ:  -0.21%   3.55%   6.79%   1.45% 
  
     Rec'd    #  Security     In At       Now    Change 
    2/3/98    12 Microsoft    156.54    155.38    -0.74% 
    2/3/98    22 Pfizer        82.30     79.75    -3.10% 
  
  
     Rec'd    #  Security     In At     Value    Change 
    2/3/98    12 Microsoft   1878.45   1864.50   -$13.95 
    2/3/98    22 Pfizer      1810.58   1754.50   -$56.08 
  
                               CASH  $16310.97 
                              TOTAL  $19929.97 
       

 

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