August 10, 1995
TYPE: Behemoth Large-Cap
Closing prices, August 9th, 1995: Bid $29 7/8, Ask $30
-------> TRADE: Selling our 97 shares
The Fool is selling its shares in the Allstate Corporation (NYSE:ALL) tomorrow as part of its yearly Beating the Dow rotation. We received 97 shares of Allstate on July 13th after Sears spun off its remaining 80% interest to its shareholders.
BUT WAIT. . . ALLSTATE'S A GREAT COMPANY! The sale of Allstate has nothing to do with our opinion of the second biggest property and casualty insurer in North America. . . on the contrary, we actually have not studied the company that much. What we have studied, though, are the returns generated by the Beating the Dow (BTD) approach. Our highly-paid scribes, searching through the BTD tome, have arrived at the conclusion that when the year-end arrives you liquidate all of your BTD-related stocks. . . INCLUDING any spin-offs. Then you buy the next bunch.
Given the long-term performance that the O'Higgins model has generated, we can't really countenance holding a stock like Allstate when we could instead be owning another of the Flying Five, namely, a naive fresh-faced youth like General Electric.
BREVITY: THE SOUL OF WIT. We're not going to waste much of your time or ours, on this one. It was a loser out of the gate in its one month in The Foolfolio.
But because we feel some moral obligation, here's the skinny on these guys.
Allstate helps dominate the property and casualty segment of the insurance business. The company was actually founded by Sears back in the days when the department store was the center of consumer life. Back then, placing all of your insurance needs adjacent to the Craftman tools section of the hardware store may have made a lot of sense. But that was 1930. By 1995, almost all Allstate agents have independent storefronts. And now that Sears has released Allstate, we shall release it as well. . . a day after these fellas forked over a parting gift dividend of $0.195 per share. Heh, heh, heh.
And that's really all we have to say about this one.
Allstate, we hardly knew ye.
--Randy Befumo, August 10th, 1995