The Daily Dow
Friday, September 13, 1996
by Robert Sheard

LEXINGTON, KY. (September 13): If this is the Friday the 13th bad luck everyone fears, find me a black cat and a broken mirror! Following yesterday's encouraging wholesale inflation report, today's Consumer Price Index (inflation on the retail level) was also lower than expected, a mere 1% for both the overall index and the core rate. And the stock and bond markets celebrated, bringing the Dow to a new record high, closing over 5800 for the first time.

And unlike yesterday's rally, today the Foolish Four shed its wall-flower personality and danced like a Fool! All five stocks were up nicely, with Eastman Kodak calling the dance steps.

Well, it's official. The variation I proposed in my Fribble called "Another Dow Acronym?" is from here on out going to be called the Unemotional Value approach (UV for short).

This is the method where you take the standard Beating the Dow order as Michael O'Higgins explains in his book and then put the #1 stock to a simple test. If that cheapest stock is also the highest yielder, skip it altogether. If it's not also the highest yielder, include it just as you would in Beating the Dow.

So, when you see us refer to UV2, or UV5, or UV9, the number simply tells you how many stocks one is including straight down the list. No doubled up positions are implied in this approach, but if you like the idea of doubling up on the potential "hot" stocks, I would suggest doubling up on the UV2 (the first two on the list). The UV2 has actually beaten the single-stock approach (PPP) mentioned by O'Higgins in his book.

As a side note, the growth approach I laid out in my Fribble called "A New Growth Model" will be called the Unemotional Growth approach (or UG), to serve as a companion to the UV approach. (We have called it the STEPS approach for the last week or so, but I want to keep the names paired and consistent.)

Enjoy the weekend, Fools. Big Dow move, new names for the models, great golf to watch with the President's Cup and the Senior Tour event in my town ... what more can a Fool want?

Transmitted: 9/13/96

      THE FOOLISH FOUR MODEL (9/13/96)  

          Day   Week  Quarter  Year  History
Fool-4   1.58%  3.18%  4.90%  18.59%  18.59%
DJIA     1.15%  3.16%  3.25%  14.10%  14.10%
S&P 500  1.40%  3.79%  1.48%  10.49%  10.49%
NASDAQ   1.96%  4.33%  0.31%  12.98%  12.98%


Bought  #    Stock     In At   Now   Change

1/2/96  142  DuPont    69.88  86.00  23.08%
1/2/96  380  Chevron   52.38  62.13  18.62%
1/2/96  148  E. Kodak  67.00  75.50  12.69%
1/2/96  149  3M        63.76  69.88   9.59%
7/16/96  14  Imation   26.16  26.25   0.35%

Bought  #    Stock          Cost       Value     Change

1/2/96  142  DuPont      $9,922.25  $12,212.00  $2,289.75    
1/2/96  380  Chevron    $19,902.50  $23,607.50  $3,705.00    
1/2/96  148  E. Kodak    $9,916.00  $11,174.00  $1,258.00    
1/2/96  149  3M          $9,500.09  $10,411.38    $911.28   
7/16/96  14  Imation       $366.21     $367.50      $1.29   

      CASH      $1,524.50      
      TOTAL    $59,296.88      



Transmitted: 9/13/96

      
      

      
      

        

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