Tuesday, December 23, 1997

The Daily Dow
by Robert Sheard

ST. PETERSBURG, FL. (Dec. 23, 1997) -- I'm not sure if this is an omen or not, but today I'm going to see an exhibit of the artifacts from the Titanic. While this is probably as useless an indicator as the star formations and the length of hemlines, I think I can make some useful comparisons.

By all accounts of the time, the Titanic was the most impressive ship ever constructed. Fast, strong, enormous, it re-wrote the book on luxury liners. And yet it still succumbed on its maiden voyage to a larger power. And I'm not referring to nature, actually, but to hubris.

The Titanic didn't sink because it struck icebergs. If we can believe the stories surrounding that first and only voyage, it sank primarily because the owners and crew felt invincible. The Titanic was designed to withstand the kind of ice it ran into, but not at the speeds at which it was being forced through the ice fields. But in order to break speed records and add to the glory surrounding the ship's maiden voyage, the Titanic was pushed beyond safe limits and the passengers paid the ultimate price.

The comparisons to investing are easy. Even the best strategies built on the soundest principles of Foolish investing can't withstand foolhardy management. The Titanic may not have become as famous had it served a long and boring career on the seas, but it would have served the purposes for which it was designed.

Stories abound of famous failures, but when it comes to one's portfolio, which is more important, to succeed quietly and unspectacularly for many years, or to sink in glorious infamy? I'll take the quiet success, thank you, and pass the extra life-jackets.

Stock  Change   Last
T    -2  5/16  61.63
GM   -   5/8   59.38
CHV  -   1/2   74.69
MMM  -   3/4   83.50
                  Day   Month    Year
        FOOL-4   -2.13%   0.96%  27.29%
        DJIA     -1.63%  -1.68%  19.28%
        S&P 500  -1.53%  -1.70%  26.78%
        NASDAQ   -1.44%  -5.66%  16.95%

    Rec'd   #  Security     In At       Now    Change

   1/2/97  479 AT&T          41.75     61.63    47.60%
   1/2/97  153 Chevron       65.00     74.69    14.90%
   1/2/97  179 Gen. Motor    55.75     59.38     6.50%
   1/2/97  120 3M            83.00     83.50     0.60%

    Rec'd   #  Security     In At     Value    Change

   1/2/97  479 AT&T       19998.25  29518.38  $9520.13
   1/2/97  153 Chevron     9945.00  11427.19  $1482.19
   1/2/97  179 Gen. Motor  9979.25  10628.13   $648.88
   1/2/97  120 3M          9960.00  10020.00    $60.00

                             CASH   $2051.96
                            TOTAL  $63645.65