One Woman's
Road to Folly.
How to win for the
long haul.

by Phil Weiss

TOWACO, NJ (Aug. 7, 1998) -- One of the biggest messages put forth here at The Fool is that you don't have to be a financial professional to build a winning investment portfolio. We really believe that even Fools can do it. If they're just willing to put in a little time learning about investment strategy and then spend a little time studying companies that interest them, voila!

Tonight we talk with one of our Foolish Cash-King readers who first got her start in investing as a school teacher in the mid-1950s. I offer this up in the best tradition of The Foolish Interview on our website -- one of my favorite online features. In today's interview, we'll be speaking about our reader's financial career and her financial thinking. Along the way we'll discuss things like savings, picking stocks, and building a portfolio. She works at a university in Utah. Her screenname on our website is "Ruffles," like the chip, and she's got twice the crunch. Listen in:

Phil: Good evening, Ruffles.

Ruffles: Hey, Phil.

Phil: I appreciate your taking the time to answer a few questions for a Foolish audience.

Ruffles: Glad to. I'm looking forward to it.

Phil: Okay, let's get started. How long have you been investing?

Ruffles: I started investing later, but I assume that you would be interested in hearing how long I've been "playing the market." The answer is that in the mid-'50s everyone from banker to janitor was buying penny uranium stocks. Small over-the-counter brokerages sprung up in coffee shops. It was a fever. As a kindergarten school teacher, I would call for up-to-the-minute quotes during recess (I kid you not!).

Then, just for the heck of it and because I had the summer off, I took a summer job with one of those small firms�

Then it became so enticing and exciting that I quit teaching school and became the cashier for the firm, which by then had put out two underwritings. (That's a 1950s word for IPO.) The partners bought a seat on the NYSE, moved into a built-in paneled location with wall-to-wall respectability and suggested that I take the test to become a registered representative. (Another '50s word for today's -- ahem -- "financial consultant.") By that time I'd acquired enough worthless stock certificates to paper a mid-sized room, I decided that -- with my newfound solid job -- I should go legit and start buying quality stocks. That's when I started to balance the disposition of funds.

General Motors offered a monthly investment plan and I sent them $10.00 every month. There was a time when "what's good for General Motors was good for the United States..." That was before Toyota, Sony, etc. Reading Ayn Rand's Atlas Shrugged gave me reason to wonder, however.

Phil: Hey, I didn't know that Drips (or their predecessors) had been around since the fifties. And I'll bet that it must have been unusual for a woman to get involved in the financial markets back then. Can you tell me a little bit more about your early experiences with investing?

Ruffles: Sure. In the late '50s when a woman married, she stayed home. It was pretty much that simple. So I followed into homemaking and family. My husband often said he really still had a working wife, because I continued to purchase securities and trade in the market. A group of my friends formed an investment club, but there were only a couple of the 20 of us who were willing to do the NAIC charting and really study the stocks we'd purchase.

The year that I was treasurer, I divided the shares out to the 5th point each month, and that was before calculators. I was serious about this subject. And we made a bit of money but finally disbanded. Too many of the group would come to the meeting with "my husband's broker said..." It was just too tough at that time for me to explain to them that every morning, many brokers get up with so many items to sell and then spend their whole day selling them -- not much more. The financial industry was that revered. I was more interested in what would help a company increase its earnings for years to come.

Phil: Maybe if you'd stayed together, you could have become the original Beardstown ladies. Plus, it sounds like you wouldn't have had their accounting problems. Sounds to me like you were trying to invest Foolishly way before Tom and Dave started The Fool. That leads to my next question. What was it that first attracted you to Fooldom?

Ruffles: I live down the road a bit from Roy, Utah... home of Iomega. A couple of years ago, I heard that this group had utilized the Internet to share information about the budding company. Being new to the 'Net then, I asked my secretary and she typed in Fool, and we discovered a wonderful site. First thing I did was buy The Motley Fool Investment Guide and one for her too. She is the wife of a medical student, and I got them to start preparing for another day. I'd wear the jester cap, but around here, they think I'm kind of strange anyway -- so that worked out fine. By now, my original book has been loaned to lots of younger contemporaries.

Phil: I know what you mean about the jester cap. I most recently wore mine when it was hat day at my son's daycare center. I got some strange looks and a few laughs. Nice to hear that you're helping to spread the word about Fooldom to others as well. Okay, could you tell me what kind of companies you invest in and why?

Ruffles: I like companies that advertise and that people know and use. I'm with the Fool Filosophy that caters to the consumer. Nordstrom's came to Salt Lake and since my daughter and I spend way too much time and money buying clothes, it appeared to be a good opportunity. I've seen it through several ups and downs and been very pleased. My husband loved to drink Coca-Cola so I gave it to him for Christmas. Outside the U.S. you see Coca-Cola in every different language, but it's always recognizable -- even in downtown Jerusalem. The entry into China was appealing. He thought the graphics and information in Coke's quarterly and annual reports were fantastic.

My stocks today are GM, Albertson's, American Stores, First Security & Zion's Bank, Mead, GE, Pfizer, Microsoft, Nordstrom, Gabelli, Coke, Disney, Xerox, EDS, and a couple of smaller spin-offs.

Phil: I'm happy to see that you have a few Cash-Kings in your portfolio. That leads to my next question -- what are your opinions about Cash-King investing?

Ruffles: Love it. The diversity is great, though it does seem to be leaning into high tech, but the balance of the Fool 4 offsets it. I thought the popular opinion poll on
the purchase was fun. (I voted for GE.)

Phil: We enjoyed the popular opinion poll, too. There were some great companies that made it to the finals. I narrowly chose Cisco over GE, but both are C-Ks in my book. Speaking of GE and larger companies in particular, do you consider social issues when investing?

Ruffles: Not particularly. I own a paper stock and even though I have lots of tree-hugging students, we all still use lots of paper. Anyway, the electronic communication explosion has fostered more tree plantings than people know about.

Elsewhere, I've found American companies more receptive to social change than any in the world. They can take time, but they get there. Xerox prided itself many, many years ago in hiring a very diverse workforce and featured pictures of the full rainbow and both genders in their reports (long before it was PC). They knew then that a diverse group brought extra strength to a company. And Xerox took a real stand against apartheid in South Africa.

Now, I'm not hung up on tobacco, etc. Those companies are so diversified that they offset the health and/or social drawbacks. And I believe that smoking is a voluntary decision. If you don't like it, don't do it. It's true of so many other products and services in the world.

Finally, the business world has truly become global. Not every country or people are like those in the United States. Social norms here are not always (or often) the social norms there. So companies face a real challenge. I find it exciting to watch them adapt.

Phil: Could you tell us a little about your investing style?

Ruffles: I don't gamble as much as I used to. I'm an equities person because I like the action. I look to P/E ratios, and am doing more business evaluation because Fooldom has showed me a new way of assessing. As for trading, usually by the time the average person gets info, it's too late. I work full time, have had a busy life outside work, and haven't had lots of time to delve and study the way the consummate daily investor should. In fact, with Iomega, I'd drive into my parking place, thinking I should call to make a trade at 9 a.m. and then get so caught up in
the pressure of the day that I truly missed the market.

My confession is that I deal with two full-service brokerage firms and have never bought on the Internet. But I do have a fine and Foolish plan. I buy a company, request a single share from the broker, then immediately start the DRIP program. When the notice of the dividend comes, I mail an additional check as a separate purchase. So I add to each stock on a quarterly basis. I started out with small amounts, but now can send quite a bit more. When I DRIP, the price is not an issue. Just do it. Just this week, I decided I had enough of one stock, and discontinued the DRIP so that I can concentrate on more recent acquisitions. There are other ways to protect a portfolio than trying to buy stocks at just the right price (and often missing them!).

Phil: Drip investing is a great way to force yourself to invest in the market regularly. Could you tell us how you go about saving the money that you invest?

Ruffles: I pay myself first -- a deduction from my paycheck to the Credit Union, then the withdrawal to make the purchases. Nothing more needed than that. It's that simple.

Phil: That sounds very Foolish. I do something similar myself. Now, could you tell us how you have gone about building your financial portfolio?

Ruffles: Sure. Slowly and deliberately. I work for a university, which offered me entry into the TIAA-CREF retirement program. I started an IRA for both my husband and I the minute they became available and continue even though the contributions are no longer deductible. I signed up for a Supplemental Retirement program with my university, and I buy stock, usually 100 shares, and start on the DRIP. The availability of a DRIP influences my decision to purchase. And, I think the portfolio has grown faster than that of your average investor because... I hardly ever sell anything.

Phil: We're not real big fans of selling stocks either. I've got just two more questions for you. If you could suggest one thing to someone just starting out as an investor, what would it be?

Ruffles: Just start. Don't be overwhelmed by financial constraints. These days, a person can buy 5-10 shares. Just because people talk in terms of hundreds or thousands, that should be of little concern to the beginner.

Then remember that "Slow and steady wins the race." Study, evaluate, make educated decisions. Know why you're doing what you're doing. Every time you get a quarterly report, type the numbers in. That forces you to look at what you're doing. Same with dividends, though the money isn't as important as knowing your portfolio. Finally, buy only enough securities that you can handle, emotionally and financially. Trying to follow too much is a nightmare.

Phil: Sounds like pretty Foolish advice to me. Okay, last question. Could you tell me the most Foolish thing that you've ever done?

Ruffles: Aw c'mon. In this many years, there are so many, I can't even list. It's like being the honoree on a podium who starts to thank everyone in the world and leaves out the most important person. Ok, I'm going to share my dumbest investments. Maybe it would be the time I bought Syntex at $189.50 on margin, and didn't have the courage to tell my husband that I'd done it. Or the time I got discouraged with Disney at 45 times earnings and sold it about five splits ago? I've since repurchased it.

I guess that in retrospect, the most foolish (small-f) things I've done have been out of frustration... or time pressures. Investing shouldn't be made on a quick decision. Nor should it be onerously boring. I guess that's what I really find great about The Motley Fool. The books set forth some basic principles that are understood by most people. (I recently gave a copy of the part of You Have More Than You Think on gambling to one of my college students because he had just returned from Nevada expecting to win $$$.) Within the right framework, set to a very wry sense of humor, you can learn lots and do some fine investment planning for yourself. I try to tell the world about that.

Phil: There's some good advice there. Glad to hear that you've gotten so much use out of Tom and Dave's books, too. I guess those guys aren't so bad, after all. I may have to reassess. Ruffles, any last comments?

Ruffles: I'm always looking for Fools out there. But how can I find them? I look up in the Utah folder for other Fools in Salt Lake and really don't know any of them... except my daughter has a friend who is a devoted follower. In another time, I'll start a support group.

Phil: Good luck with that! Hehehe. And thanks again for the interview. Enjoy the weekend and the rest of the summer.

Ruffles: Thanks, it's been fun.

Okay, Cash-King Fools -- this was another fine week. Our stocks just keep inching farther ahead of the S&P 500 by the day... and we're a few percentage points ahead of the Nasdaq. All that without annual expense ratios, without the huff and strut of Wall Street, and we've got Uncle Sam held at bay. Kind of a nice approach, all told, I must say, if I must say, yes, if I must say so me'self (that's my Monty Python to head into the weekend!).

Fool on!

Phil Weiss

08/07/98 Close

Stock  Change    Bid 
 AXP   +  1/16  101.13 
 CHV   +  7/16  77.38 
 CSCO  -3 1/16  96.88 
 KO    -1 3/16  80.44 
 GPS   +  13/16 62.56 
 EK    +  9/16  83.56 
 XON   +2       66.94 
 GM    +  13/16 71.06 
 INTC  -  5/16  86.69 
 MSFT  -  15/16 105.88 
 PFE   -1 11/16 103.63 
 TROW  +  3/4   35.13 
                  Day   Month    Year  History 
         C-K      -0.11%  -1.78%  13.52%  13.52% 
         S&P:     -0.02%  -2.79%   8.80%   8.80% 
         NASDAQ:  +0.94%  -1.37%  11.73%  11.73% 
 Cash-King Stocks 
     Rec'd    #  Security     In At       Now    Change 
     2/3/98   24 Microsoft     78.27    105.88    35.27% 
     2/3/98   22 Pfizer        82.30    103.63    25.91% 
     5/1/98   37 Gap Inc.      51.09     62.56    22.46% 
    2/27/98   27 Coca-Cola     69.11     80.44    16.40% 
    6/23/98   23 Cisco Syst    86.35     96.88    12.19% 
     2/6/98   56 T. Rowe Pr    33.67     35.13     4.31% 
    2/13/98   22 Intel         84.67     86.69     2.38% 
    5/26/98   18 American E   104.07    101.13    -2.83% 
 Foolish Four Stocks 
     Rec'd    #  Security     In At     Value    Change 
    3/12/98   20 Eastman Ko    63.15     83.56    32.33% 
    3/12/98   20 Exxon         64.34     66.94     4.05% 
    3/12/98   17 General Mo    72.41     71.06    -1.85% 
    3/12/98   15 Chevron       83.34     77.38    -7.16% 
 Cash-King Stocks 
     Rec'd    #  Security     In At     Value    Change 
     2/3/98   24 Microsoft   1878.45   2541.00   $662.55 
     2/3/98   22 Pfizer      1810.58   2279.75   $469.17 
     5/1/98   37 Gap Inc.    1890.33   2314.81   $424.48 
    2/27/98   27 Coca-Cola   1865.89   2171.81   $305.92 
    6/23/98   23 Cisco Syst  1985.95   2228.13   $242.18 
     2/6/98   56 T. Rowe Pr  1885.70   1967.00    $81.30 
    2/13/98   22 Intel       1862.83   1907.13    $44.30 
    5/26/98   18 American E  1873.20   1820.25   -$52.95 
 Foolish Four Stocks 
     Rec'd    #  Security     In At     Value    Change 
    3/12/98   20 Eastman Ko  1262.95   1671.25   $408.30 
    3/12/98   20 Exxon       1286.70   1338.75    $52.05 
    3/12/98   17 General Mo  1230.89   1208.06   -$22.83 
    3/12/98   15 Chevron     1250.14   1160.63   -$89.52 
                               CASH     $94.76 
                              TOTAL  $22703.32 
 *The year for the S&P and Nasdaq will be as of 02/03/98