The Daily Dow
Monday, October 14, 1996
by Robert Sheard (MF DowMan)

LEXINGTON, KY. (October 14): Get out the party hats, the champagne, the noise makers! The Dow broke through 6,000 today and stayed there, closing above the millennium mark for the first time. As exciting as that is, though, the press has been making much too much of the speed at which the market has passed through the last few milestones. The fear-mongers would have you believe that it's the third sign of the apocalypse, but what they so conveniently forget is how percentage gains work.

The percentage gain from 2,000 to 3,000 on the Dow was a gain of 50%. This most recent 1,000 points (from 5,000 to 6,000) was only a gain of 20%. That's a heck of a difference, so of course the time needed to journey the 1,000 points wasn't as long. But to hear some reporters, that 1,000-point gap from 5,000 to 6,000 is being treated the same way as the 1,000 points from 2,000 to 3,000. Don't be fooled, Fool! The next 1,000 points is only 17% away, and the next after that only 14% away. So while it can be made to sound like the market's careening towards disaster, when you look at the actual percentage gains for each additional thousand points, it's not that unusual at all. An 11% per year gain for the market would have us trading above 17,000 a decade from now. Keep things in perspective.

In Foolish Four news, CHEVRON posted a strong gain today as news broke that Energy Secretary Hazel O'Leary has called for a meeting of the top oil executives to determine the best way to avoid a heating oil crisis this winter. Government and consumer groups have grown worried that heating oil prices could soar if we get a sudden cold snap because fuel inventories are at record lows and refiners are already operating near capacity. The Energy Department expects retail prices for heating fuel to be at least fifteen to twenty cents per gallon higher than last year's prices.

And EASTMAN KODAK today announced the formation of Entertainment Imaging, which will include Kodak's current Professional Motion Imaging division, Kodak Imagination Works, the new Motion Imaging Platform Center and New Business Ventures.

Professional Motion Imaging provides feature film, television, commercial production and interactive media services. Kodak Imagination Works will provide prototypes of new products and move them into the market. The unit will initially focus on location-based entertainment, personalized entertainment imaging, and the creation and use of motion picture content for a variety of purposes. Kodak Imagination Works will open its first site on the West Coast in the next several months. Two other facilities will eventually open outside the U.S. The Motion Imaging Platform will develop and supply motion imaging products based on multiple technologies. And finally, New Business Ventures will provide support for new products and services that meet a market need, but don't fit elsewhere in the company.

Transmitted: 10/14/96

      THE FOOLISH FOUR MODEL (10/14/96)  

          Day   Week  Quarter  Year  History
Fool-4   0.91%  0.91%  4.82%  26.18%  26.18%
DJIA     0.68%  0.68%  2.17%  17.45%  17.45%
S&P 500  0.41%  0.41%  2.36%  14.22%  14.22%
NASDAQ   0.65%  0.65%  2.40%  19.41%  19.41%


Bought  #    Stock     In At   Now   Change

1/2/96  142  DuPont    69.88  96.00  37.39%
1/2/96  380  Chevron   52.38  66.88  27.68%
1/2/96  148  E. Kodak  67.00  77.88  16.23%
1/2/96  149  3M        63.76  71.38  11.94%
7/16/96  14  Imation   26.16  25.63  -2.04%

Bought  #    Stock         Cost       Value       Change

1/2/96  142  DuPont      $9,922.25  $13,632.00  $3,709.75    
1/2/96  380  Chevron    $19,902.50  $25,412.50  $5,510.00    
1/2/96  148  E. Kodak    $9,916.00  $11,525.50  $1,609.50    
1/2/96  149  3M          $9,500.09  $10,634.88  $1,134.78    
7/16/96  14  Imation       $366.21     $358.75     $(7.46)  

      CASH      $1,524.50      
      TOTAL    $63,088.13    


Transmitted: 10/14/96

      
      

      
      

        

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