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DRIP PORTFOLIO

Drip Portfolio Report
Tuesday, December 23, 1997
by Jeff Fischer (TMFJeff@aol.com)


CHICAGO, IL (Dec. 23, 1997) -- Monday I wrapped up, with hearty contentment, my initial foray into the food and beverage companies that I'm researching. Randy, meanwhile, still has a few interesting companies to review (including Pepsi), and he'll get his chance beginning next week. My first review narrowed the list substantially as we for now threw away the big cereal guys due to price competition and slow sales growth, while agreeing to look more closely at a handful of other companies, including Anheuser Busch and Quaker Oats. We'll being to focus on the selected companies after Randy finishes his part of our Foolish due diligence.

Today the Drip Port beat the S&P, though we were still down fractionally. Intel (Nasdaq: INTC) and Johnson and Johnson (NYSE: JNJ) both surrendered a meaningless percentage amount. I -- on the other hand -- am surrendering my hands in order to write this. I'm in the Chicago area visiting my family and writing in a small off-shoot of the house, unfortunately in a room that doesn't have much heat and has three walls to the outside. So, I can't really feel my hands, but it's good to be in the crisp lake air again. (Sure, sure it is.) Long story short: short column. (All right: I also need to shop tonight. I admit it.) So let's simply look forward and see what we can offer here in the future.

To begin the New Year, I'd like us to write some long-standing columns ("standing content," as we call it) on margins, return on equity, how to value companies and management, and business models -- all so readers can more easily continue to look for investments on their own, or at a quicker pace than we do if they wish. And, of course, those columns will make for great general reference and learning. We'll write the columns here and then move them into a standing content area. Also for the New Year, as addressed on Friday, we'll let people know where we're sending the monthly money earlier than we have in the past. Beginning in January, for example, we're sending $50 to both Intel and Johnson & Johnson each and every month, until there is reason to deviate or until we buy another stock.

Ziiiiiip, vrooooom, zapppppp!...

That's the holiday zipping by. Before we know it, it'll be January 1 and we'll be adding $100 to the portfolio and then sending it away. (We begin in January to add $100 to the portfolio on the first day of each month, rather than the fifteenth.) By now everyone should have their Johnson & Johnson account open and ready to go (we received our statement two or three weeks ago). The JNJ investment date is the tenth of each month, so we need to send the money very early in January. Be Foolishly prepared if you are following along (or even send the money now, if you wish).

Next year we're also going to continue to follow the earnings reports of our companies and other key companies even more closely. Little in the world gives investors as much insight into a company's operations than earnings reports, if investors know how and what to look at. That we're allowed the opportunity for such insight every three months is something that U.S. investors often take for granted, but something that all investors in the world deserve. Our guys working for the Fool UK (on AOL at keyword: FOOL UK and coming soon to the Web) often only get information every six months.

Also for next year, I'd like to see us really explain more, try to teach more (as we learn, too), and talk about investing philosophies more. We're going to find about six to eight companies to buy over the next 20 years, and we already have two. (Yes, great companies aren't easy to find, and the bigger they are, the more diversified, too, so one needn't worry too much about being underdiversified. GE itself is a diversified giant.) Anyway, we have plenty of time to find companies, and for the time being we're content with sending our money to the two companies that we own at these prices to build our base. In the meantime, the more we all learn, the better. That means taking this column to the message boards more, too, and Randy and I interacting more along with Vince (TMF Elwood) on the DRIP message board. I'm thinking of ways to make the column much more interactive going forward.

Okay. At this point I almost can't feel my fingers. I've cranked the heat up, but it'll take a while before it gets to this room. But it's well worth it. And after all, there is a place for me to sleep tonight in this house. Final thought before the holiday: please remember those less fortunate this holiday season. Please consider the Fool Charity Fund -- any little bit helps.

Tomorrow TMF Sargon, a crucial man behind the scenes, will fully explain how to account for DRIPs and track your portfolio against the S&P. Lookin' forward to that! And for America Online readers, don't miss Randy tonight in a special chat. Details below.

Have a very happy and Foolish holiday.

--Jeff

Industry Focus '98 Auditorium Event. As we roll out of 1997 and into 1998, many of you are looking for ideas on where to put your money for 1998. Join us on Tuesday night, December 23, at 10 p.m. EST for a discussion of the year ahead in a number of industries including Electronic Contract Manufacturing, Semiconductor Capital Equipment, and PC Manufacturing. Randy Befumo (TMF Templr) and company will be onstage taking your questions and talking about the year ahead, as well as discussing their stock choices for this year's Industry Focus research report.

Do your Foolish gift shopping now, in time for the Holidays. And consider the Fool's Industry Focus '98 book -- to learn not only about industry-leading stocks, but about the industries in which they operate as a whole -- and see which one company in each industry that our news and analysis team favors most.

Have You Given? The Fool Charity Fund


TODAY'S NUMBERS
Stock   Close    Change
INTC  $70 3/16  -1 1/4
JNJ   $66 1/16   -7/8   
            Day        Month      Year      History
Drip        (0.95%)   (4.72%)   (14.85%)    (14.85%)
S&P 500     (1.53%)   (1.70%)    26.78%      (1.28%)
Nasdaq      (1.44%)   (5.66%)    16.95%      (5.26%)


Last Rec'd  Total #  Security   In At     Current
12/01/97      6.082       INTC     $81.346   $70.188
11/14/97      1.000       JNJ      $62.125   $66.063


Last Rec'd  Total #  Security  In At    Value   Change
 12/01/97   6.082     INTC    $494.72   $426.86  ($67.86)
 11/14/97   1.000     JNJ      $62.13    $66.06    $3.94 


Base:   $900.00
Cash:   $389.75**
Total:  $886.55

The Drip Portfolio has been divided into 41.647 shares
with an average purchase price of $24.105 per share. GOAL: The portfolio began with $500 on July 28, 1997, adds $100 on the 15th of every month, and the goal is to grow the port to $150,000 by August of the year 2017.


 


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