FOOLISH FOUR PORTFOLIO

<FOOLISH FOUR PORTFOLIO>

Foolish Advice

By Barbara Eisner Bayer (TMF Venus)

MOOSEHEAD LAKE, MAINE (August 24, 1999) -- Once the investing bug bites, we frequently find ourselves preoccupied with the stock market and doing everything possible to guarantee our success.

A basic tenet of Foolishness, however, is never to neglect your personal life by obsessing about investing. This is especially true when we first begin and have so much information at our fingertips.

All of us Fools have been there. And we've learned from our experiences. Here are some of Fooldom's finest, reflecting back on their personal journeys and offering some heartfelt advice.

If you could give one piece of advice to a beginning investor, what would it be?

TMF 2 Aruba:
Take your time. Anything that looks good today will look good tomorrow (or next month) if it truly is good.

TMF DrT: Don't be in a hurry -- take your time to learn.

TMF Judy: If you're a young beginning investor, do it NOW. Don't wait. If you're an older person, just starting out, do it now too. Time is money.

Have you used the Foolish Four Strategy? If so, what role has it played for you in the context of your overall investments?

DavidGardner:
Familiarizing yourself with the Foolish Four approach is one of the most important steps to getting comfortable with long-term, self-directed investing, whether you elect to use it or not. It's a key early step toward becoming a Fool.

TMF Judy: The first stock I ever bought was Merck. I purchased it after reading a few pages of the O'Higgins book at Barnes & Noble. (You didn't think I was going to BUY it, did you?) I went home, got the yields and the prices, and the PPP turned out to be Merck (a most successful investment). A month later I found the MF AOL site and the F4.

TMF DrT: It made me what I am today, a Fool.

Looking back on your investing career, what one belief did you have before you began that you have since learned is not true?

TMF 2 Aruba:
That's an easy one. Before I became Foolish, I used to think that you had to have a broker to invest, and that one couldn't invest on his own unless he was really, really, really smart.

TMF Judy: I didn't invest in the market before the advent of the Web. So, if I've learned anything, it's that the stock market is not solely for the super rich or coupon-clipping grannies.

Is there one mistake you see beginners repeatedly making? If so, what is it?

TMF 2 Aruba:
Actually, there are a few. One is that beginners seem to think that the cheaper the stock, the better the investment. Arrrgh! Another is the myth that stock splits really are significant.

TMF DrT: Trading too frequently.

TMF Judy: Two mistakes: 1) thinking that a penny stock, because it is "cheap," cannot possibly go down in price any more than it presently is; and 2) feeling a sense of panic and selling too soon when the Dow and the rest of the market are in decline.

TMF Nico: Not just beginners.... Holding out for that extra 1/16 or 1/8 or even 1/2 point on a stock that you really want to buy -- or sell. You can end up chasing the price down when you're looking to buy, or up when you're looking to sell, and you can wind up kicking yourself when it takes off in the opposite direction. I learned this the hard way. But I can't say with which stock... it's still too painful to think about.

What fictional or nonfictional character is most like you when it comes to investing?

TMF Jeanie:
Mr. Magoo. Because I find it serves me best to be blind to financial magazine "picks and pans," most analyst recommendations from the Wise, and crowd sentiment posted on some of our message boards. Nearly all of that so-called advice is focused on short-term outlooks.

TMF 2Aruba: Professor Kingsfield from The Paper Chase. You come to The Motley Fool with a skull-full of mush... and you leave thinking like an investor.

Today's Stock Lists | 1999 Dow Returns

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Foolish Four Portfolio

8/24/99 Closing Numbers
 Ticker   Company   Dly Pr Chg   Price 
CAT   CATERPILLAR INC               1/16    $63.00
IP   INTL PAPER                    -1 1/2    $52.94
JPM   MORGAN (JP)                   9/16    $140.31
MMM   MINNESOTA MIN'G/MFG           -5/16    $98.63

  Day Week Month Year
To Date
Since
12/23/98
Annualized
Foolish Four -.57% 2.46% 8.20% 33.04% 35.02% 56.74%
S&P 500(DA) .24% 2.00% 2.60% 11.50% 11.56% 17.80%
NASDAQ 1.21% 3.93% 4.32% 25.52% 26.69% 42.49%
DJIA -.15% 1.65% 5.90% 22.89% 22.62% 35.69%

 Trade Date   # Shares   Ticker   Cost/Share   Price   LT % Val Chg 
  12/24/98   24 CAT     43.083   $63.00   46.23%
  12/24/98   14 MMM     73.571   $98.63   34.05%
  12/24/98   9 JPM     105.514   $140.31   32.98%
  12/24/98   22 IP     43.551   $52.94   21.55%

 Trade Date   # Shares   Ticker   Cost   Value   LT $ Val Ch 
  12/24/98   24 CAT     $1,034.00   $1,512.00   $478.00
  12/24/98   14 MMM     $1,030.00   $1,380.75   $350.75
  12/24/98   9 JPM     $949.63   $1,262.81   $313.19
  12/24/98   22 IP     $958.12   $1,164.63   $206.50
  Cash: $80.43  
  Total: $5,400.62  

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.