The Daily Dow Approach, 10/07/97: The Daily Dow

The Daily Dow
Tuesday, October 7, 1997
by Robert Sheard

LEXINGTON, KY (Oct. 7, 1997) -- Another market-beating day for the Foolish Four. So far in 1997 our beloved mechanical strategy has lagged the major indices, chiefly because the stock weighted most heavily -- AT&T <% if gsSubBrand = "aolsnapshot" then Response.Write("(NYSE: T)") else Response.Write("(NYSE: T)") end if %> -- has been floundering.

Today, though, AT&T took the weight of the portfolio on its shoulders and advanced. The news behind Ma Bell's move today is that the long-distance giant has resumed talks with GTE CORP. <% if gsSubBrand = "aolsnapshot" then Response.Write("(NYSE: GTE)") else Response.Write("(NYSE: GTE)") end if %> about a possible alliance -- perhaps a reaction to the $30 billion bid WORLDCOM <% if gsSubBrand = "aolsnapshot" then Response.Write("(Nasdaq: WCOM)") else Response.Write("(Nasdaq: WCOM)") end if %> put in last week for MCI COMMUNICATIONS <% if gsSubBrand = "aolsnapshot" then Response.Write("(Nasdaq: MCIC)") else Response.Write("(Nasdaq: MCIC)") end if %>.

In a USA Today story, several other companies were mentioned as possible alliance partners should the GTE talks fail. These companies include SPRINT <% if gsSubBrand = "aolsnapshot" then Response.Write("(NYSE: FON)") else Response.Write("(NYSE: FON)") end if %>, US WEST <% if gsSubBrand = "aolsnapshot" then Response.Write("(NYSE: USW)") else Response.Write("(NYSE: USW)") end if %>, TELEPORT COMMUNICATIONS GROUP <% if gsSubBrand = "aolsnapshot" then Response.Write("(Nasdaq: TGCI)") else Response.Write("(Nasdaq: TGCI)") end if %>, and INTERMEDIA COMMUNICATIONS <% if gsSubBrand = "aolsnapshot" then Response.Write("(Nasdaq: ICIX)") else Response.Write("(Nasdaq: ICIX)") end if %>.

If AT&T and GTE were to join forces, there's some speculation that the partnership would solve AT&T's ongoing search for a new chief executive officer to succeed Robert Allen. GTE's top executive, Chuck Lee, might well get the nod if a deal were struck.

In other Foolish Four news today, the GENERAL MOTORS <% if gsSubBrand = "aolsnapshot" then Response.Write("(NYSE: GM)") else Response.Write("(NYSE: GM)") end if %> board has finally approved the spin-off of its Hughes Electronics unit that currently trades as GM, class H. Securities valued at roughly $32 per share will go to current GMH shareholders and GM common stock shareholders will get securities valued at $4 per share. The spin-off comes about as a result of Hughes' sale of its defense businesses to RAYTHEON <% if gsSubBrand = "aolsnapshot" then Response.Write("(NYSE: RTN)") else Response.Write("(NYSE: RTN)") end if %>. The transaction is still subject to shareholder approval, no slam dunk either, as there is still plenty of grumbling going on about the proposed pay-outs to different classes of shareholders.

All in all, a good day for the Foolish Four, with AT&T and 3M <% if gsSubBrand = "aolsnapshot" then Response.Write("(NYSE: MMM)") else Response.Write("(NYSE: MMM)") end if %> helping the portfolio sprint ahead of the market for the second day this week. With almost three months left in the year, there's still time enough for the Foolish Four to surge and catch the index once again in a buzzer-beater finish.

(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. ________________________________

1997 Foolish Four Model

Stock  Change   Last
--------------------
T    +1  9/16  45.50
GM   -   1/16  68.44
CHV  +   7/8   88.69
MMM  +3        99.00

           Day   Month    Year
                  Day   Month   Year
        FOOL-4   +2.07%   4.44%  21.32%
        DJIA     +0.96%   2.93%  26.83%
        S&P 500  +1.07%   3.78%  32.72%
        NASDAQ   +0.89%   3.06%  34.56%

    Rec'd   #  Security     In At       Now    Change
   1/2/97  153 Chevron       65.00     88.69    36.44%
   1/2/97  179 Gen. Motor    55.75     68.44    22.76%
   1/2/97  120 3M            83.00     99.00    19.28%
   1/2/97  479 AT&T          41.75     45.50     8.98%


    Rec'd   #  Security     In At     Value    Change
   1/2/97  153 Chevron     9945.00  13569.19  $3624.19
   1/2/97  179 Gen. Motor  9979.25  12250.31  $2271.06
   1/2/97  120 3M          9960.00  11880.00  $1920.00
   1/2/97  479 AT&T       19998.25  21794.50  $1796.25


                             CASH   $1167.51
                            TOTAL  $60661.51