Three Foolish Lessons
Friday, March 20, 1998
by David Forrest (DavidF@fool.com)

ALEXANDRIA, VA (March 20, 1998) -- Hey there, Fools! TMF Cheeze was supposed to write the Fool portfolio report tonight, but he's been missing in action all day. There's a wild rumor going around that the Cheezemeister got great seats for tonight's Cinderella NCAA tournament match-up between Valparaiso and Rhode Island and is playing hooky. I'll be sitting in for him tonight. (Speaking of March Madness, don't forget to log-in to see how you did in our stock contest this week!)

The Fool Portfolio weighed in on the positive side today, climbing 0.46%. We fell to the S&P, but hammered the Nasdaq by more than a full percentage point. The Nasdaq, and many of our stocks, were actually down today. Eight of the fourteen stocks in the portfolio lost ground and we still had a positive day. The winners for us were America Online (NYSE: AOL), the Spiders, and the Foolish Four stocks. Believe it or not, there are actually three little lessons to be gleaned from our winners, especially on a day when the beloved tech sector got hit.

Lesson 1 -- Let your winners run.

Many critics of the Fool Portfolio point to the fact that AOL, for one, accounts for so much of the movement of the portfolio on any given day. I say, "Thank goodness it does!" AOL has been a monster company and a great investment for the past four years. Don't be afraid to sell weak companies at losses, but let your winning companies fly!

Lesson 2 -- Sometimes just buying the market is best.

For anyone who's been around Fooldom for a while, you know that we teach people to invest in index funds or Spiders until they have enough money, education, and confidence to start picking their own individual stocks. We decided to purchase the S&P Depositary Receipts a while back because we were sick of our money just collecting dust in a money market account at horribly low interest rates, so we put it to work by "buying the market," and we've been darn happy with that decision. The Spiders are up more than 14% for us, and a leader again today. Learn more about Spiders by clicking the blue link above.

Lesson 3 -- Never underestimate the power of the Foolish Four

In November, I had my brother buy the Foolish Four in my nephew's college account. Since then, with little fanfare, these multi-billion dollar, multi-national companies have been kicking butt! My nephew's college savings account is about 30% more valuable than it was just five months ago. Today, in the Fool Portfolio, two of the four Foolish Four stocks climbed higher, while the other two were almost unchanged. Dupont (NYSE: DD) was up $ 1 1/2 and Exxon (NYSE: XON) was higher by $2 5/16. My nephew owns Dupont, too. Maybe now he'll be able to afford to go to Harvard ;) For more on the Foolish Four, check out our Foolish Four report. Robert is writing about Philip Morris tonight.

It's closing time here at Fool HQ. We're all off to have fun with our family and friends this weekend, watch a little college hoops (GO RHODY!!!), and get ready for the Oscars on Monday night. I hope everyone has a fantastic weekend.

Good night,

David

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TODAY'S NUMBERS

Stock Change Bid ---------------- AMZN - 1/4 83.75 AOL +1 1/2 62.63 T - 1/16 65.94 DD +1 1/2 70.13 DJT - 1/16 9.63 XON +2 5/16 67.13 INVX -1 3/16 21.06 IP - 1/8 49.88 IOM - 3/16 7.06 KLAC - 5/16 37.63 LU + 5/8 120.13 COMS - 9/16 33.19 TDFX - 5/16 28.13 SPY + 19/32 109.84
Day Month Year History FOOL +0.46% 2.81% 8.92% 265.54% S&P: +0.86% 4.75% 13.27% 139.78% NASDAQ: -0.60% 1.05% 13.93% 148.43% Rec'd # Security In At Now Change 8/5/94 710 AmOnline 3.64 62.63 1622.15% 5/17/95 1960 Iomega Cor 1.28 7.06 451.58% 10/1/96 42 LucentTech 47.62 120.13 152.28% 9/9/97 290 Amazon.com 38.22 83.75 119.12% 8/12/96 130 AT&T 39.58 65.94 66.60% 2/20/98 215 DuPont 59.83 70.13 17.20% 1/8/98 115 S&P Depos. 95.91 109.84 14.53% 1/8/98 425 3Dfx 25.67 28.13 9.57% 2/20/98 200 Exxon 64.09 67.13 4.74% 2/20/98 270 Int'l Pape 47.69 49.88 4.58% 4/30/97 -1170*Trump* 8.47 9.63 -13.65% 8/24/95 130 KLA-Tencor 44.71 37.63 -15.85% 6/26/97 325 Innovex 27.71 21.06 -23.99% 8/13/96 250 3Com Corp. 46.86 33.19 -29.18% Rec'd # Security In At Value Change 8/5/94 710 AmOnline 2581.87 44463.75 $41881.88 9/9/97 290 Amazon.com 11084.24 24287.50 $13203.26 5/17/95 1960 Iomega Cor 2509.60 13842.50 $11332.90 8/12/96 130 AT&T 5145.11 8571.88 $3426.77 10/1/96 42 LucentTech 1999.88 5045.25 $3045.37 2/20/98 215 DuPont 12864.25 15076.88 $2212.63 1/8/98 115 S&P Depos. 11029.25 12632.03 $1602.78 1/8/98 425 3Dfx 10908.63 11953.13 $1044.50 2/20/98 200 Exxon 12818.00 13425.00 $607.00 2/20/98 270 Int'l Pape 12876.75 13466.25 $589.50 8/24/95 130 KLA-Tencor 5812.49 4891.25 -$921.24 4/30/97 -1170*Trump* -9908.50 -11261.25 -$1352.75 6/26/97 325 Innovex 9005.62 6845.31 -$2160.31 8/13/96 250 3Com Corp. 11715.99 8296.88 -$3419.12 CASH $11233.54 TOTAL $182769.88