FOOLISH FOUR PORTFOLIO

Foolish Four Portfolio
Doubts About the Foolish Four
Heading south for the winter

By Ann Coleman (TMF AnnC)

RESTON, VA (Oct. 14, 1999) -- The bluebirds are having a convention outside my window today, and they have caused me to entertain some doubts about Foolish Four investing.

While others watch the market and fret over the last two terrible days and today's puny recovery, those bluebirds caused me to fret about the Foolish Four's long-term viability.

They must be planning a trip to warmer climes. At least a dozen of these lovely birds, usually not seen hanging out in big groups, are flitting around the hickory tree outside my window. You see, I am observing them from three stories up so I am at treetop height. My townhouse "backs to woods," as real estate agents like to say, and I work in my top-floor office next to sliding glass doors that look out into the trees just a few feet away.

Sounds nice, eh? It really is nice, and that's what has me worried. More and more people are working at home these days, or, like me, work part of the week at home and part in the office. I know a guy who trades beef (not futures, stuff to be delivered today) from an office overlooking his pool -- or from a cellphone while he's in the pool.

For me, how I work really brings home (sorry!) the changing nature of our society. Some people have their epiphany watching drivers with cellphones, some when they realize that Buck Rogers' Ray Gun really exists. And how far are we from Dick Tracy's two-way wrist radio/TV?

"Get with it!" I think. The future is passing you by. The world is changing and you need to be invested in the future -- Qualcomm, eBay, Dell, Cisco, Amazon.com, even (hold your nose and invest) AOL. High tech investors have had a very wild, and in many cases very profitable, ride.

(Disclosure: In addition to the Foolish Four, I am invested in several high-tech stocks, although, except for Cisco and AOL, not those I mentioned. However, I didn't exactly buy them early on.)

How can the Dogs of the Dow possibly do as well as the companies that are shaping our future, changing the way we live and work, taking over the world?!?

Pardon me while I breathe into a paper bag. There, that's better.

Ever have such doubts yourself? Good!

Question everything. Even what you read here.

But now that my CO2 level is back to normal, I remember that, first of all, the Dow isn't exactly the Backwoods Stock Index, despite what critics term its "lack of relevance." And even if it were, there's a lot to be said for stodgy. Stodgy stocks may not double twice in a year, but they rarely drop 80% in two months either.

Oh, yes, and there is the fact that I have a habit of buying those high-tech glamor stocks right before the 80% drop. Hmmm, I had forgotten about that for a moment. Of course, there are also the ones that have leveled out right after I bought them, only to resume their upward spiral a week or so after I got disgusted and sold.

Right.

Back on track, now. Stodgy stocks are good. If you are patient, stodgy stocks can make you rich enough to fly south every winter.

Fool on and prosper!

Today's Stock Lists | 1999 Dow Returns

Read More Foolish Four Reports


Top Dow Stocks
( RP Order )

10/14/99

1. Philip Morris
   (NYSE:MO)
2. * Sears
   (NYSE:S)
3. * General Motors
   (NYSE:GM)
4. * Goodyear Tire & Rubber
   (NYSE:GT)
5. * JP Morgan
   (NYSE:JPM)
6. Caterpillar
   (NYSE:CAT)
7. Chevron
   (NYSE:CHV)
8. AT&T
   (NYSE:T)
9. Eastman Kodak
   (NYSE:EK)
10. International Paper
   (NYSE:IP)

NOTE: Today's Foolish Four stock selections are marked with an asterisk.

Foolish Four Portfolio

10/14/99 Closing Numbers
Ticker Company Dly Pr Chg Price
CATCATERPILLAR INC-15/16$55.63
IPINTL PAPER3/4$50.13
JPMMORGAN (JP)3/8$110.88
MMMMINNESOTA MIN'G/MFG1/16$91.88

  Day Week Month Year
To Date
Since
12/24/98
Annualized
Foolish Four .44% -1.64% -.50% 18.30% 20.06% 25.40%
S&P 500(DA) -.17% -3.94% .06% 4.99% 5.05% 6.29%
NASDAQ .20% -2.76% 2.21% 28.01% 29.20% 37.32%
DJIA (DA) .53% -3.41% -.49% 12.95% 13.12% 16.49%

Trade Date # Shares Ticker Cost/Share Price LT % Val Chg
12/24/9824CAT43.083$55.6329.11%
12/24/9814MMM73.571$91.8824.88%
12/24/9822IP43.551$50.1315.10%
12/24/989JPM105.514$110.885.08%

Trade Date # Shares Ticker Cost Value LT $ Val Ch
12/24/9824CAT$1,034.00$1,335.00$301.00
12/24/9814MMM$1,030.00$1,286.25$256.25
12/24/9822IP$958.12$1,102.75$144.63
12/24/989JPM$949.63$997.88$48.25
  Cash: $80.43  
  Total: $4,802.31  

Key
• S&P 500 (DA) = dividend adjusted. Dividends have been added to the total return of the index.
• DJIA (DA) = dividend adjusted. Dividends have been added to the total return of the DJIA.

Note
The Foolish Four Portfolio was launched on December 24, 1998, with $4,000. Additional cash is never added, all transactions are discussed and explained publicly before being made, and returns are compared daily to the S&P 500 and the Dow. (Dividends are included in the yearly, historic and annualized returns.) Stocks are chosen once per year using a formula based on dividend yield and price. See The Foolish Four Explained for details.