<THE DRIP PORTFOLIO>
A Four-Month Respite
Drip writers seek easy, slothful life
by Jeff Fischer (TMFJeff)
ALEXANDRIA, VA (April 1, 1999) -- April marks the beginning of the Drip Port's 20th month. Some of you have been reading since the beginning, but many of you joined us along the way at various points. It's an excellent time to review what we're doing and why we're doing it by revisiting past columns -- columns written so long ago that even I've forgotten about them. We have hundreds of archived columns and many of them are lasting statements on investment philosophy. It is these past columns that we'll begin to point to regularly here, rather than writing anything new.
We have approximately 80 old columns that are worth re-reading, representing 16 weeks of columns. We'll begin to feed these into this space today and Brian, Vince, George, and I will see you in... let's see... in August. That's just in time for our two-year anniversary. (Gotta love this job.)
Logically, we'll begin this review at the beginning of the portfolio's life. The Drip Port launched on a smoldering hot July 27, 1997. On August 1 of that year, Randy Befumo -- the portfolio's co-founder -- began to write about our purpose and approach to investing. These early columns are excellent to read now if you haven't read them yet, or to revisit even if you have. They begin with Randy's column on Growth and Value, two qualities that we seek when investing. (Randy also discussed the Foolish Four in relation to direct investing.)
The following week, the columns become more specific and therefore more useful. On August 7, 1997, Randy began to outline our investment approach, called "Buying a Company with a 20-Year Time Horizon." He discussed specific industry qualities that we seek and those we avoid. Next, on August 8, 1997, Randy continued with our investment approach, part 2, this time further addressing the qualities we seek.
Those three brief columns represent the first look at our past -- and therefore, at our foundation. Please read those in preparation for Monday and the next four months of reruns. (By August, we'll be re-running our complete oil and gas study, even though it just ended last week and news will surely emerge to change the industry's landscape by summer, outdating our columns. That's okay. We want the summer off.)
The following are the last words you'll hear from me for a while.
Remember as you consider our portfolio's performance that we're merely 20 months old, meaning that about half of our money has been invested 10 months or less. It takes time to generate returns. We're predictably slow to start. When we launched this portfolio (as you'll see in a future rerun) we stated that we didn't expect to keep up with the S&P 500 for many years due to the slow process of dollar-cost-averaging. The advantages of this investment approach still outweigh the disadvantages. Even five years from our launch, however, in 2002, nearly a full half of our investments will have been invested in stock for 2 1/2 years at the MOST -- and most of it for much less time.
The Drip Port is a 20-year project (at least). It will take 20 years to judge the results. At 10 years we'll only have a decent idea of our start. (On the plus side, the fact that this is a 20-year project makes it possible for us to take the next 4 months off.)
Let's review the short week (and how nice that it was short -- we only had to write four columns).
On Monday we discussed the lessons that we learned from our five-month oil study. On Tuesday, George talked about monthly investment allocation methods for your portfolio. On Wednesday, we explained the various ways to begin DRPs and DSP (Direct Stock Plans), reviewing the latest offerings from enrollment services and previewing some new offerings, too. We also shared that this coming Monday (ahem) we'll offer news from a new Campbell Soup (NYSE: CPB) conference call. Finally, if you're interested in the valuations of our stocks, last Friday we ran through the latest P/Es on their forward earning estimates. (It'll be a while before we do that again!)
To close, don't miss the big news regarding the Fool's very first IPO underwriting, eMeringue. Have a happy April Fool's Day, and an even better weekend!
[To discuss this column and direct investing, please visit the message boards linked in the top right of this page.]
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