The Broker & the Fool
A Fable
by Brian Graney (TMF

ALEXANDRIA, VA (Oct. 1, 1998) --A broker and a Fool are sitting next to each other on a long flight from Los Angeles to New York. The broker leans over to the Fool and asks her whether she would like to play a fun investing game.

The Fool just wants to take a nap, so she politely declines and rolls over to the window to catch a few winks.

The broker persists and explains that the game is really easy and a lot of fun. He explains: "I ask you a question about the stock market, and if you don't know the answer, you pay me $5, and vice-versa."

Again, the Fool politely declines and tries to get some sleep.

The broker, now somewhat agitated, says, "Okay, if you don't know the answer you pay me $5, and if I don't know the answer, I will pay you $50," figuring that since he is a broker and she is just a Fool, he will easily win the match.

This catches the Fool's attention and, figuring that there will be no end to this torment unless she plays, she agrees to the game.

The broker asks the first question: "What are the names of the 30 companies in the Dow Jones Industrial Average, in alphabetical order?"

The Fool doesn't say a word, reaches into her purse, pulls out a five-dollar bill and hands it to the broker.

Now, it's the Fool's turn. She asks the broker: "What stock always finishes the trading day priced at $10 per share, regardless of whether the stock market averages are up or down?"

The broker looks at her with a puzzled look.

He takes out his laptop computer and searches on the Internet. He places calls to researchers at Harvard Business School and the New York Stock Exchange. Frustrated, he sends e-mail to all his co-workers, friends, and clients. All to no avail.

After an hour, he wakes the Fool and hands her $50. The Fool politely takes the $50 and turns away to get back to sleep.

Enraged, the broker wakes the Fool again and asks, "Well, what is the answer?"

Without a word, the Fool reaches into her purse, hands the broker $5, and goes back to sleep.


This little fable was sent to me with different characters playing the parts of the Fool and the broker, but the message remains the same.

There are actually two Foolish lessons which long-term DRP investors can take away from this tale. First, never underestimate the importance of naps. And second, arrogant Wisdom will get you nowhere, while Foolish common sense will net you $40. Or something to that effect.

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

10/01 Close

Stock Close Change CPB $50 3/16 Unch. INTC $83 7/16 -2 5/16 JNJ $76 3/8 -1 7/8
Day Month Year History Drip (1.90%) (1.90%) 9.92% (6.39%) S&P 500 (3.01%) (3.01%) 1.64% 3.68% Nasdaq (4.81%) (4.81%) 2.67% 1.16% Last Rec'd Total # Security In At Current 09/02/98 8.027 CPB $52.867 $50.188 09/01/98 9.727 INTC $80.238 $83.438 09/08/98 6.564 JNJ $70.161 $76.125 Last Rec'd Total # Security In At Value Change 09/02/98 8.027 CPB $424.36 $402.86 ($21.50) 09/01/98 9.727 INTC $780.50 $811.62 $31.12 09/08/98 6.564 JNJ $460.54 $499.68 $39.15 Base: $1900.00 Cash: $186.07** Total: $1900.23

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. 9/30/98: Sent $100 to buy more JNJ.