Touchstone Halloween
News and bad holiday humor

by Brian "Brain Dead" Graney (TMFPanic)

ALEXANDRIA, VA (Oct. 30, 1998) -- Happy Halloween eve to everyone!

As I'm sure you are all aware, tomorrow is the Day of the Great Pumpkin. But before you pull on that Barney mask and head out the door with the kiddies on a trick-or-treating run, we have some (haunted) housekeeping to attend to in our wicked Drip Port.

(Alright, the Halloween references are probably already wearing thin. But please humor me, and be thankful that this holiday only comes around once a year.)

On Monday, everyone's favorite goblin Jeff "No Relation to Amy" Fischer wrote a mini-rebuttal to my recent bearish take on Johnson & Johnson (NYDE: JNJ). This was merely a thinly veiled attempt to psych me out for our upcoming Dueling Fools feature on the healthcare giant. By the way, you can look for that duel to magically appear on the Fool's site next week. However, based on the number of back-and-forth J&J columns Jeff and I have written over the past week or so, I'm not really sure if we are going to have any new arguments left for that feature. Hopefully, we'll think of something. If we don't, no Fool HQ candy for us!

Tuesday, Jeff asked everyone to post their preferences for companies to study next in the energy sector on the message boards. We received some great suggestions for individual companies, and I compiled a list of the most frequently mentioned firms on Wednesday. On Thursday, I talked about the importance of not narrowing our list of companies too much yet, citing the example of our Mellon Bank investment in the big, scary world of financial services companies.

Next week, we will continue our recent rhapsodizing on the energy sector, and maybe we'll actually be able to work out a framework for our study -- with your help, of course. So keep posting your favorite companies and other thoughts on the Drip Companies message board.

Meanwhile, there was some interesting news from our four holdings this week. Campbell Soup's (NYSE: CPB) only news item was an agreement with the Feds to pay a $1.2 million penalty to settle alleged Clean Air Act violations at a can manufacturing facility in California. The plant was acquired from Silgan Holdings (Nasdaq: SLGN) in June, so this seems like it may be an instance of bad luck rather than criminal mischief on Campbell's part. Just like Halloween 16 - Michael Myers Joins the Circus, this event may sound a little scary at first, but it will be forgotten in a week or so.

Intel Corp. (Nasdaq: INTC) cut the prices of some of its chips this week, with the price tag of its 350 Mhz Pentium II falling to $213 from $299. The cost of the 333 Mhz Celeron chip dropped to $159 from $192. No big surprise here, considering Advanced Micro Devices (NYSE: AMD) also cut the prices of its rival chips aimed at inexpensive PCs this week. Intel also said it will invest $20 million in a joint venture with cable-based Internet access firm At Home Corp. (Nasdaq: ATHM) and two Dutch cable companies. Hopefully, the venture will help spur demand for computers and high-speed Internet services in the Netherlands and Europe. Sounds like a pretty smart idea, if you ask me. To read more about the deal, click here.

Over at Mellon Bank (NYSE: MEL), our favorite financial services company sold its card processing business to Paymentech (NYSE: PTI) this week for an undisclosed sum. (Don't you just love the sound of that? Undisclosed Sum. Sounds like the name of an obscure rock band. Or maybe a "loaded" mutual fund with lots of hidden fees.)

The spirits inhabiting FoolHQ suspect that there may be more to this move by Mellon than meets the eye. The firm may very well be giving us a hint of things to come, like the witches in that famous scene from Macbeth. Next week, we may try to set aside some time in the Drip Port to examine this deal in greater detail.

Finally, J&J got a pre-Halloween egging today, courtesy of the ghouls over at the Food and Drug Administration. (Well, okay, they're not really that ghoulish.) At issue is the way J&J intends to market its new Benecol margarine spread, which is slated to be offered in the Portland, Oregon test market next week.

J&J wanted to market the product as a cholesterol-reducing dietary supplement, which would not require FDA approval. However, the FDA said a dietary supplement can only be marketed in a general sense as promoting good health. If J&J tries to sell Benecol using the cholesterol-reducing claims, then the product will enter the food additive realm, which is a whole different animal and requires FDA approval. Confused? Good, that means you're normal. Of course, if you work at the FDA, this will seem like first grade math.

J&J said it is not going to change its marketing plan, no matter what the folks at the FDA say. We'll see. And of course, we'll write about it if the tussle turns into a full-scale brouhaha.

In the meantime, keep the energy sector ideas coming and have a happy (and Foolish) Halloween.

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

10/30/98 Close

Stock Close Change CPB 53 5/16 - 1/2 INTC 89 3/16 - 9/16 JNJ 81 1/2 - 7/8
Day Month Year History Drip (0.83%) 4.04% 16.57% (0.73%) S&P 500 1.18% 8.03% 13.22% 15.49% Nasdaq 0.81% 4.58% 12.80% 11.14% Last Rec'd Total # Security In At Current 09/02/98 8.027 CPB $52.867 $53.313 09/01/98 9.727 INTC $80.238 $89.188 10/07/98 7.850 JNJ $71.405 $81.500 Last Rec'd Total # Security In At Value Change 09/02/98 8.027 CPB $424.36 $427.94 $3.58 09/01/98 9.727 INTC $780.50 $867.56 $87.06 10/07/98 7.850 JNJ $560.53 $639.78 $79.25 Base: $2000.00 Cash: $186.08** Total: $2121.35

The Drip Portfolio has been divided into 85.474 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:
09/21/98: Sent $77 to buy/enroll in MEL.
10/24/98: Sent $40 to buy more INTC.
10/26/98: Sending $60 to buy more JNJ.