Drip Portfolio Report
Wednesday, June 3, 1998
by Jeff Fischer (JeffF@fool.com)

Alexandria, VA (June 3, 1998) --Intel (Nasdaq: INTC) continued to tank after a Hambrecht & Quist analyst lowered earnings estimates for 1998 to $2.92 from $3.04 per share and cut 1999 estimates to $3.84 per share from $3.93. Not a drastic cut, but enough to send the entire market lower -- on a dime.

Asia is a chief concern to the point where I've read that some analysts don't believe that business in the overall region will completely recover for as many as ten years. While that's a long time to wait, it wouldn't be the end of the world even if it did prove entirely true. Computers will still be bought over that time -- net growth in the PC industry will still be substantial, just not as substantial as was previously thought.

The Drip Port taking Intel as its first investment rather than Coca-Cola (NYSE: KO) has proven interesting -- in an ironic way. The concerns voiced about Coca-Cola are proving more true with Intel so far (regarding lower earnings growth), though over twenty years the competition between the two companies and their stock prices will probably prove close. After astounding five and ten year time periods, Intel is likely looking ahead at a disappointing few years (but not decades), where it might make millions less than the billions that it was pulling in previously, though it should still make billions. We're probably in a good position being able to buy more Intel every month in a DRP.

Meanwhile, early losses in a young portfolio are hardly a reason to hold one's head low. The fact that we're investing (unlike much of the world), and investing for the long term is only reason to celebrate. The Drip Portfolio personifies someone with very little to nothing (beginning with $500), just getting out of debt and beginning to invest regularly in the stock market in leading companies that he or she understands -- and doing it Foolishly, enjoying it, whatever happens in the near term, and believing in the long term.

Last minute schedule change: Dale is about to wrap up his closer look at First Tennessee (Nadsaq: FTEN) with a third installment that will run tomorrow. I'll see you again on Friday for Touchstone Friday.

Fool on,

Jeff Fischer

FoolWatch -- It's what's going on at the Fool today.


Stock Close Change CPB $56 5/16 + 3/8 INTC $65 15/16 -3 5/16 JNJ $67 3/4 - 11/16
Day Month Year History Drip (2.35%) (4.02%) (2.89%) (17.30%) S&P 500 (0.94%) (0.74%) 11.57% 13.81% Nasdaq (1.11%) (2.06%) 10.95% 9.32% Last Rec'd Total # Security In At Current 04/13/98 1.000 CPB $53.690 $56.313 05/01/98 9.380 INTC $80.487 $65.938 05/07/98 5.099 JNJ $69.154 $67.750 Last Rec'd Total# Security In At Value Change 04/13/98 1.000 CPB $53.69 $56.31 $2.62 05/01/98 9.380 INTC $754.94 $618.47 ($136.47) 05/07/98 5.099 JNJ $352.62 $345.46 ($7.16) Base: $1600.00 Cash: $386.12** Total: $1406.36

The Drip Portfolio has been divided into 63.266 shares with an average purchase price of $23.710 per share.

The portfolio began with $500 on July 28, 1997, adds $100 on the 1st of every month, and the goal is to have $150,000 in stock by August of the year 2017.

**Transactions in progress: 5/22: Sent $70 to buy more CPB, sent $30 to buy more JNJ.