Fribble Thursday, January 6, 2000

Going With a Winner

By Empress Cindy (cimes@earthlink.net)

I started investing in stocks in late September of 1998 after reading Dave and Tom's You Have More Than You Think. I began conservatively, with Disney and Pfizer. Then on October 1, I bought some Cisco. Over the next several months I added some Gillette and 3M and then got bolder and bought some techs -- Intel, Lucent, EMC, and more Cisco.

On October 1 of this year, I divided my total holdings by my investment and had a profit rate of 26.5%. Not bad for a rookie, but most of the gain came from my Cisco, which had more than doubled. So I thought about things for a day or two and decided the smart thing was to go with the winner -- Cisco. I kept my EMC, which was keeping pace with Cisco, and sold everything else and replaced it with Cisco.

Since then, the Cisco I bought in October of 1998 has more than tripled, the shares I bought in January of 1999 have just about doubled, and the stock I bought in October is up about 50%. Oh, yes, I bought some more at the end of November, and that's up over 13%. And my entire portfolio is up 61%.

I realize that Cisco isn't always going to be rising this steeply. In fact, it'll probably have several periods when it goes down, as it has over the last year. But I know Cisco is a winner -- it has no debt, it builds infrastructure, and its stock has at least doubled every year since 1994. And everything I read about John Chambers, its CEO, convinces me that he knows precisely what he's doing.

I've also followed this philosophy with my husband's 401(k). We're limited to mutual funds, so I split the money into three, but after eight months Janus Worldwide was doing so much better than the others that I pulled our money out of the other two and put it all in Janus. The first shares we bought in October of 1998 were at $42.12; it closed December 7 at $71.28. Of course, we've been buying shares all along, so I can't figure out our profit margin, but that first investment has yielded 69%.

I realize that the pundits consider my investments ill-advised and would encourage me to diversify, but I think they're wrong. If Cisco -- or Janus Worldwide -- gets into trouble, I can always sell and switch. But I don't think they will. Of course, I'll continue watching and paying attention to what's going on in the world and with Cisco, but I have a deep sureness that these winners are going to stay strong for a long time.

And in the meantime, I'll just keep buying more Cisco and Janus Worldwide and marvel at the wonders of compound interest.

Yee-hah!