DRIP PORTFOLIO

<THE DRIP PORTFOLIO>
Investing Made Simple
...it's the Drip Port way

by Brian Graney (TMFPanic)

ALEXANDRIA, VA (April 7, 1999) -- Just for kicks, I punched the word "investing" into my Web search engine of choice today to see what would happen. (I needed something to write about, after all). The search spit out a total of 477 websites related to investing. As popular as that word has become in our late 20th century world, I somehow expected to see more.

There are sites about women and investing and kids and investing. There is information tailored for value investors and growth investors. There are areas about investing in bonds, stocks, mutual funds, ancient Roman coins, and North Korean real estate. Investing calculators, investing gurus, investing bulletin boards, even something called an investing diary washed up in the results. You can't escape it -- investing is everywhere.

This might sound like a painfully obvious comment coming from a Fool like myself. Needless to say, every inch of this website is devoted to investing in some way, shape, or form. The surging tidal wave of investing information available to individuals with access to the Internet is a powerful swell that the folks here at Fool HQ have enjoyed riding for the better part of the last five years. We should be ecstatic about this development, jumping up and down at our good fortune. We are living at a time when so many people have access to so much information, opening up the possibilities of wealth creation and financial freedom to everyone. This is a good thing, right?

Well, yes and no.

Here at the Drip Port, we find ourselves constantly amazed at the wealth of investing and market information the Internet brings to us at the touch of a single button. Access to continually updated stock quotes, regular Securities and Exchange Commission filings from companies, links to corporate websites, and charts of past performance figures are great assets for novice and experienced investors alike. All of these things are available for free over the Internet (and right here at the Fool, too). They make our stock-picking lives much easier, providing us with the harvesting tools needed to mow down the results of the investing pros like so many stalks of corn on a Nebraska plain. We like these things.

From a young, wet-behind-the-ears investor's point of view, however, the investing information onslaught that the Internet hath wrought can sometimes be more hindrance than help. There is a lot of clutter out there to root through. This became blindingly apparent to me during the five-month-long study of the oil and gas industry that Jeff and I recently wrapped up. Separating the good information from the bad was hard enough; selecting the truly useful information from what remained was harder still.

This is not to say that all of the information on investing floating around in cyberspace and promulgated through other media is useless. That is not the case at all. But over the course of our oil and gas study, the most important lesson I learned was how to quickly sift through the wealth of information available to investors in order to find the truly important pieces of data worth keeping. This is a crucial skill for all Drip investors to learn, especially those on the verge of making their very first decision to become business owners by enrolling in a Drip.

Jeff and I used all kinds of sources for background information on the oil and gas industry, including mass circulation financial magazines, industry-specific trade publications, books, and even (gasp) publicly available sell-side analyst research reports. But even with the aid of all of those research tools and all of the different viewpoints they offered, our final analysis came down to answering some very simple questions: Who is the most profitable company in this business? Who has the most advantages over its rivals? Who has the best chance of outperforming the market over the next 20 or 30 years?

We can't predict the future, but by having kept our analysis simple and focused on a few key elements, Jeff and I feel that we are coming away from our study with a pretty good understanding of where the oil and gas industry is going and who will be leading the way in the decades to come. We did our own research and came to our own conclusions. We cut through all of the clutter out there and boiled it down to the few elements that really mattered in our eyes.

Tomorrow, I'll share the name of the company with which I personally plan to start my first Drip. Mimicking our oil and gas study, the decision to invest in this company hinged on answering only a few obvious, straightforward questions. Surprisingly, it was a much less painful decision than I had first expected it would be. And it is not based on a "can't miss" tip from a Wise guru, an expensive subscription to some exclusive investment newsletter, or a complex algorithmic investing software program thought up by a group of Nobel laureates.

It was, in effect, pretty simple. The way Drip investing should be.

[To discuss this column and direct investing, please visit the message boards linked in the top right of this page.]

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4/07/99 Close

Stock    Close      Change
JNJ     94 7/8     +5/8
INTC   132 1/8     +1 11/16
CPB     39 13/16   -1 5/16
MEL     71 3/16    +1
              Day      Month      Year       History
Drip         0.55%     4.82%      5.13%      19.57%
S&P 500      0.68%     3.15%      7.94%      41.32%
Nasdaq      (0.73%)    3.36%     16.04%      59.64%

Last Rec'd    Total #    Security    In At    Current
 02/01/99      8.092       CPB      $52.852   $39.813
 03/04/99      9.734       INTC     $80.259  $132.125
 03/09/99      9.076       JNJ      $74.910   $94.875
 03/08/99      6.977       MEL      $64.293   $71.188

Last Rec'd  Total #  Security  In At    Value   Change
 02/01/99    8.092     CPB    $427.68  $322.16($105.52)
 03/04/99    9.734     INTC   $781.24 $1286.10 $504.86
 03/09/99    9.076     JNJ    $679.89  $861.09 $181.20
 03/08/99    6.977     MEL    $448.56  $496.66  $48.10

Base:  $2400.00
Cash:    $24.33**
Total: $2990.34

The Drip Portfolio has been divided into 100.036 shares with an average purchase price of $23.991 per share.

The portfolio began with $500 on July 28, 1997, adds $100 to invest every month, and the goal is to have $150,000 in stock by August of the year 2017. Due to the slow nature of dollar-cost-averaging, we don't expect to seriously challenge the S&P 500 for the first 3 to 5 years as we build an investment base. The long-term advantages of dollar-cost-averaging still overcome the short-term disadvantages, however.

**Transactions in progress:
03/22/99: Sent $100 to buy more MEL.


</THE DRIP PORTFOLIO>