Drip Portfolio Report
Friday, January 2, 1998
by Randy Befumo (RandyB@fool.com)

ALEXANDRIA, VA (Jan. 2, 1998) -- We start out 1998 with a recap of what we did during the week. During the holiday shortened week Jeff gave us a nifty little essay on Monday entitled "A Compounding Dollar" to illustrate why putting even a small amount of money in stocks can turn into an awful lot of money down the line. Setting aside another one of Jeff's lame attacks to actually ridicule me, I believe you will find the essay quite good -- especially considering it was written by someone the courts determined long ago was criminally insane.

On Tuesday and Wednesday I plunged back into the Drip Portfolio with renewed vigor, aching to finish our gargantuan survey of Branded Food Companies. As we have now covered Pepsico and the ever-controversial Philip Morris, the only companies left are poundcake lovin' Sara Lee (NYSE: SLE) and the recently public International Home Foods (NYSE: IHF), maker of Chef Boyardee, PAM cooking spray and Bumble Bee tuna. I will nail these two companies down on Monday and Tuesday and on Wednesday, Thursday and Friday we will compile the results of the massive food survey and narrow down which companies are going to make it to the second round.

What I hope to do next week is simple -- list out all of the companies we have covered, look at their current valuations and screen through to find the ones that offer the most compelling combination of quality and valuation. This list should be helpful to you all as you make similar decisions, so keep your eyes peeled toward the end of the week. I expect a lot of offline thumb-wrestling to determine some of the relatively close matches, so stay tuned for any reports where it seems like Jeff or I cannot use the space key anymore -- this will be a signal that we have each respectively lost the thumb-wrestling bouts.

Although our look at Branded Food Companies may appear overlong to many of you, let me stress that this is the exact procedure that both Jeff and I use to find investments. Instead of doing it all behind the scenes and then giving you the results, you actually have the benefit of seeing every step of our work as we have gone along. As our goal here in the Dripfolio is to teach people how to fish, not to catch fish for them, giving a thorough-going example of how one systematically combs through an industry group in order to find the most attractive companies makes an awful lot of sense.

Jeff wanted me to be sure to mention we sent $50 to Johnson & Johnson (NYSE: JNJ) today and we hope to see that transformed into about 0.8 shares of J&J on January 7. If we can cut through all of the food companies next week, by the week after we could have a third company join our pantheon of Drip companies. So fasten your seatbelts, folks -- the ride is going to get much more exciting in the next few days.

Have You Given? The Fool Charity Fund


Stock Close Change INTC $70 1/4 -1 7/16 JNJ $65 7/8 -3/8
Day Month Year History Drip 1.39% 1.39% 1.39% (13.65%) S&P 500 0.48% 0.48% 0.48% 2.49% Nasdaq 0.71% 0.71% 0.71% (0.77%) Last Rec'd Total # Security In At Current 12/01/97 6.082 INTC $81.346 $72.625 11/14/97 1.000 JNJ $62.125 $65.063 Last Rec'd Total # Security In At Value Change 12/01/97 6.082 INTC $494.72 $441.68 ($53.04) 11/14/97 1.000 JNJ $62.13 $65.06 $2.94 Base: $1003.88 Cash: $393.63** Total: $996.50

The Drip Portfolio has been divided into 41.647 shares with an average purchase price of $24.105 per share.

The portfolio began with $500 on July 28, 1997, adds $100 on the 15th of every month, and the goal is to have $150,000 in stock by August of the year 2017.

**Transactions in progress:

Sent $100 to purchase INTC on 12/19/97.