Drip Report Lite!
Plus, answering questions from Fools...
by Vince Hanks (TMFElwood@aol.com)


NORTHVILLE, MI (Sept. 23, 1998) --I'm very pleased to introduce to you tonight a new Foolish product, one that I feel will benefit mankind for years to come. Drumroll please...

It's the Drip Report Lite!

Less heavy, less filling than your usual Drip Report, and it's 100% fat-free! And what better day to debut this lean, mean, healthy and green (environmentally safe too!) version of the nightly report than Wednesday! (Hump Day!)

Seems perfect to me. Oh, and I plan on having Cindy Crawford be our spokesperson.

(Jeff, please feel free to continue this tradition on future Wednesday's if you wish.) (For a nominal royalty.) (Hey, Cindy don't come cheap, ya know!)

For this edition of Drip Report Lite!, we'll dip into the mailbag and answer a few questions from our readers (paraphrased, in the spirit of liteness).

First up, Alan responds to Monday's column by asking: "To reduce tax exposure altogether, would it be Foolish to set up a Roth IRA for the child who is investing?"

Great question, Alan! There are no age limitations with a Roth IRA. Anyone with "earned income" can hold and contribute to a Roth (investment income is not earned income). The restriction here would be the minimum age required to earn income in your state.

The account holder can contribute up to 100% of his annual earned income or $2,000, whichever is LESS. The upper income limits are adjusted gross income under $160,000 for married couples and $110,000 if you are single. The money in a Roth IRA earns and compounds on a tax-free basis, and may avoid Federal income taxes altogether when withdrawn. This is a great way to establish a tax-free retirement plan for Fool's of all ages.

Next up, Brian wonders: "I just read your article on attributes on good DRP candidates. How would I go about finding information on "DRP companies," such as earnings, debt, and share repurchases? Is there a resource that you know of?"

Brian, my Foolish friend, I was negligent in not mentioning where a Fool can find such information. You can access everything you need to run down the eight points I listed at The Motley Fool Quotes and Data site (http://quote.fool.com). Particularly useful are the SEC Filings, in which you can find quarterly and annual reports that contain income statements, balance sheets, etc. Oh, and to measure stock repurchase, look for a decreasing balance of shares outstanding.

By the way Fools, Brian is 17 and already thinking about DRPing his way toward a better future. Very, very Foolish of you, Brian!

Our last letter for this evening is from a Tom, a Georgia native. Tom writes: "Dear Fools, I'm training in the javelin throw in hopes of making the 2000 Olympics in Sydney. Do you have any advice on improving my distances?"

Interesting question, Tom! I can't help you improve your chances of winning, but I do have a suggestion that will increase your distances on average. If you face west when throwing, the javelin will travel farther due to the Earth's rotation than it would traveling other directions (true fact). I suppose the only way this could benefit you, though, is if you can persuade the other athletes to throw facing east.

Good luck in making the games! We Fools will be pulling for you.

That's all we have time for tonight. I received many other letters with very good questions regarding accounts for minors that will take a bit of research to answer. I'll follow up on those in a future report.

Have a Lite and Foolish Nite!

--Vince Hanks

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


9/23 Close

Stock Close Change CPB $53 1/8 +1 1/2 INTC $87 1/16 +3 1/2 JNJ $79 7/16 +1 3/16
Day Month Year History Drip 2.80% 14.24% 14.58% (2.42%) S&P 500 3.52% 11.34% 9.86% 12.06% Nasdaq 3.68% 17.41% 12.09% 10.44% Last Rec'd Total # Security In At Current 09/02/98 8.027 CPB $52.867 $53.125 09/01/98 9.727 INTC $80.238 $87.063 09/08/98 6.564 JNJ $70.161 $79.438 Last Rec'd Total # Security In At Value Change 09/02/98 8.027 CPB $424.36 $426.43 $2.07 09/01/98 9.727 INTC $780.50 $846.89 $66.39 09/08/98 6.564 JNJ $460.54 $521.43 $60.89 Base: $1900.00 Cash: $186.07** Total: $1980.82

The Drip Portfolio has been divided into 81.201 shares with an average purchase price of $23.399 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:
9/21/98: Sent $77 to buy/enroll in MEL.