Community Spotlight
...reveals great Foolishness everywhere

by Jeff Fischer (TMFJeff)

ALEXANDRIA, VA (June 3, 1999) -- The best of Fooldom doesn't occur in these columns; it takes place on the message boards. This has been the case since day one, when the Fool opened. In the beginning, the Fool was only a message board. And, boy, it was interesting. And helpful.

Now the Fool has thousands of message boards and thousands of daily participants. Of all of them, a few of my favorite boards are the Drip boards -- those related to this portfolio. They're among my favorite for many reasons, including the fact that the people using them are all long-term investors. People don't post in reaction to daily price or market moves. They post about businesses and about direct investment plans, and they post to question, logically, and to help provide answers to others. These boards truly are a great community of Fools united. And again, the best of Foolishness takes place on boards like these.

Now, we are going to spotlight message board content more often for that reason. Perhaps as often as once or twice a week this month, we'll pull some of the best content from the two Drip boards and we'll share it, with editorial comment or not, here in this space. Today we have two Foolish posts and their responses. The first post comes from the Drip Basics board, where any of your general drip investing questions can be promptly answered.

A Fool named "amc4" had this question:

"I have 5 grandchildren and would like to start DRIPS for each. I have about $250 for each to start. How does one buy just one or a few shares of stock to get started? Schwab told me they would not handle such small transactions even though I have an account there. Thanks."

Many responses followed within hours. Our own TMF Elwood wrote:

"Hi, amc4!

"There are a number of ways to begin a Drip, but they essentially fall into two camps: 1) Using a broker, 2) Using a service or club.

"Since your broker discourages small purchases (not all are like this), you could either open a second brokerage account or use a service such as those that I'll list below [ed. note: excluded here, please visit the post for the list]. If you decide to open another brokerage account, be sure to inquire about minimum balance requirements and the fee (if any) to have shares issued to you in your name, which is a requirement for Drip eligibility."

Several other Fools helped as well. The strangest issue to me, meanwhile, was Schwab's reluctance to make the trades. Obviously, that's not smart business. The broker could make a profit by charging a small, typical fee. Anyway, the important thing is that, by the next day, Audrey (amc4) was ready to invest. She wrote:

"Good Morning... Thank you for the prompt and informative replies to my initial inquiry about starting Drips for my grandchildren. You all provided very helpful info, so now I need to do my part and follow through. I am new to all of this (both Drips and message boards) and I appreciate all the helpful info I got so quickly. Audrey."

I may sound pollyannaish, but this is what the Fool is about: helping others to help themselves. The Drip community is, in my humble opinion, one of the best at that.

The next post we highlight today came from our other board, the Drip Companies board, where companies and investment strategies are discussed more often than the basics of Drips. The following is a great example of Foolishness. A Fool named "sburger" wrote:

"I'd be interested in the consensus view of getting into the Home Depot DRiP. I haven't done the Foolish number crunching yet. However, I'm very impressed with what I've learned about the program, the online sign up, minimum initial investment, no fees for automatic debit, etc. What have been the returns for those of you who have taken the plunge?

"Any words for the, um... foolish?



A few Fools quickly responded to warn about the fees with Home Depot (NYSE: HD). Then a consistently Foolish Fool, Trevar, wrote this detailed response:

"I just started my Home Depot DRiP in January, so I don't have much to say about returns yet. Of course, for the past 10 or so years, Home Depot's stock has rewarded investors with returns that were truly unbelievable. The stock has been struggling during the past several months, but the company's only real competitor is Lowe's (which also has a DRiP -- and a fee-free one at that). Comments from people who have been to both stores are split about 50-50 on which stores are better. Some say HD has better selection and better customer service. Others say Lowe's stores are cleaner and the prices on some items are lower.

"The company is continuing to open a large number of new stores across the U.S. and they opened a store in Santiago, Chile. HD reported a 45% increase in first quarter '99 earnings, and a 36% increase in 4th quarter '98 earnings. Despite the explosive growth since 1982, HD seems to still have some innovative tricks up its sleeve.

"I chose HD because I'm familiar with it (there are no Lowe's in So. Cal. that I'm aware of). I prefer to invest in companies whose products and services I use, if possible. I was also attracted to HD because they have a lot of involvement in community activities. One thing that I found quite impressive was that HD has on more than one occasion donated materials to help victims of natural disasters. I live in earthquake-prone So. Cal. When you see contractors and hardware stores immediately begin price-gouging after an earthquake, it is quite remarkable that Home Depot actually tries to reach out and help those in need.

"Just my personal take. I know other people feel strongly that Lowe's is just as good AND has a fee-free DRiP. Home Depot's plan does have some fees. --Trevar."

Alongside this, another always Foolish Fool, GLSmyth (George), offered a way to begin comparing Home Depot to Lowes in his post. (News to me: Lowes has outperformed Home Depot since 1991.)

If you have questions about direct investing, or about companies and strategies, please visit everyone on our message boards. It is the best place for Foolish discussion and for learning. Heck, I'd like to merge this column with a message board and place our daily column as a post on the board, more or less. There is no reason that our work here should be highlighted with the great work going on "behind it," on the Drip message boards.

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