The Daily Dow
Friday, September 19, 1997
by Jerry Thomas (TMF Cheeze)
Sherman Oaks, CA (Sept. 19, 1997) -- Here I am, sitting in the Sheard Seat, where no Cheeze has dared to loiter before. Chalk up another Foolish First!
The operative word in that sentence is, of course, "loiter." One of the Foolish Four's greatest charms is that it requires so little effort to use... just log onto the Fool once a year for ten minutes or so, and follow that with a quick call to your broker. After that, an investor is left with little to do but wait a year or more before making the next Dow Switch. Maybe we should call it the Thumb-Twiddling Portfolio.
But since we're all sitting on the front porch here, we might as well talk about something. Our minds drift in no structured pattern, and our thoughts fix on phantoms and chimeras that do not really exist but seem intriguing nonetheless. Of late, those thoughts have locked onto the horserace among the various low-priced, high-yield Dow stocks as they vie for those coveted bottom-dwelling spots in the Dow Dogs investing approach. They shift positions from day to day, floating up, floating down, tumbling over and around each other, and we watch them, mesmerized, unmoved... making the Foolish Four truly the Lava Lamp of the Investing World.
All of which, obviously, reminds me of Vinny Testaverde.
Vinny Testaverde??
Yes, the workhorse quarterback for the National Football League's struggling Baltimore Ravens. The journeyman 10-year pro. The very symbol of mediocrity in the NFL.
But before we get to Vinny, let's note the one earthquake today in the Dow Stocks. UNION CARBIDE <% if gsSubBrand = "aolsnapshot" then Response.Write("(NYSE: UK)") else Response.Write("(NYSE: UK)") end if %> suffered a 7.58% downdraft in Friday's trading after warning that it would not meet analysts' earnings expectations in the third quarter. The company is blaming currency fluctuations, slipping margins, and higher raw materials costs. The Dow as a whole was down a very slight 5.45 points, a move amounting to a tiny fraction of a percent. Snoozeville.
Scottie, the lava lamp needs more power!
Okay, back to Vinny.
Vinny's mediocre showing as a professional quarterback isn't entirely his own fault, because throughout his career he has always been stuck playing for cellar-dwelling teams... the Tampa Bay Buccaneers, the Cleveland Browns, and now the Ravens. And the tragedy is, it was his own talent that may have led him to such sorry fate.
You see, in college, Vinny was unstoppable.
In his two years as the starting quarterback at the University of Miami, his team's win-loss record was a stunning 21-1. He set U of M school records in passing yardage and touchdown passes, and all during his senior year he was considered a shoo-in for the Heisman Trophy, the top individual award for college football athletes. True to form, he won that award in 1986 by the second-highest voting margin in history. The guy was good.
So, by now, you obviously see the parallel between Vinny and the Foolish Four.
No?
Okay, I'll keep explaining.
It has to do with the NFL draft. Every year the teams of the NFL choose from the pool of graduating college players, one by one, until the roster is full and all the choosing is done. It's pretty much the same way it's done in the sandlot among neighborhood kids. I pick, then you pick, then I pick, then you... and under the NFL's rules, the team with the worst record in the previous season gets to pick first.
All through the 1986 season it became a running gag that the worst team would obviously end up with poor Vinny. Vinny, who was clearly the college player of the year, was going to be the first pick in the draft. My local newspaper at the time even jumped into the fun, running what they called the Vinny Testaverde Sweepstakes, and printed the league standings in reverse order, suggesting that the very bottom team would "win" by claiming Vinny as their prize. At the end of the year, that team proved to be the Tampa Bay Buccaneers, which, as expected, drafted Testaverde as the number one pick in the first round. Vinny's disappointing career as the star quarterback for a series of losing teams was underway.
All of which reminds me of the battle for those bottom slots in the Dow Dividend strategy. Naturally, the CEOs of these companies are not struggling to achieve poor stock performance just so they can be Dow Dog picks, no more than the 1986 Tampa Bay Bucs were trying to lose games to win the services of Vinny Testaverde. But we watch the jockeying and the elbowing among these companies as they seem to be jostling to make their way into our portfolios. It's fun to watch. There emerges a certain spectacle about it, even though little of lasting import is taking place.
It's kind of like watching pro football, I guess.
Best of luck to Vinny and the Ravens this Sunday when they play the Oilers in Tennessee.
(c) Copyright 1997, The Motley Fool. All rights reserved. This material is for personal use only. Republication and redissemination, including posting to news groups, is expressly prohibited without the prior written consent of The Motley Fool. ________________________________
Stock Change Last -------------------- T - 3/16 44.00 GM + 7/8 69.56 CHV -1 3/16 87.31 MMM - 13/16 86.69
Day Month Year
FOOL-4 -0.36% 10.09% 16.60% DJIA -0.07% 3.87% 22.78% S&P 500 +0.34% 5.67% 28.32% NASDAQ +0.62% 5.87% 30.16% Rec'd # Security In At Now Change 1/2/97 153 Chevron 65.00 87.31 34.33% 1/2/97 179 Gen. Motor 55.75 69.56 24.78% 1/2/97 479 AT&T 41.75 44.00 5.39% 1/2/97 120 3M 83.00 86.69 4.44% Rec'd # Security In At Value Change 1/2/97 153 Chevron 9945.00 13358.81 $3413.81 1/2/97 179 Gen. Motor 9979.25 12451.69 $2472.44 1/2/97 479 AT&T 19998.25 21076.00 $1077.75 1/2/97 120 3M 9960.00 10402.50 $442.50 CASH $1009.44 TOTAL $58298.44