The Daily Dow
Tuesday, November 18, 1997
by Robert Sheard

LEXINGTON, KY. (Nov. 18, 1997) -- It looks like our Dow Pilgrim, AT&T <% if gsSubBrand = "aolsnapshot" then Response.Write("(NYSE: T)") else Response.Write("(NYSE: T)") end if %>, has once again found the true path. Ever since management finally announced Michael Armstrong as successor for current chief executive Robert Allen, the stock has continued its recovery.

Today optimism continued to grow as two major brokerage firms reiterated "buy" ratings on the stock. Lehman Brothers and Sanford Bernstein both recommended AT&T and speculated that Armstrong is likely to start slashing costs.

With today's jump of more than 7% (even in a down market), AT&T has now recovered nearly 70% from its low in April.

For 1997 Foolish Four followers, this is particularly welcome as AT&T represents 40% of the year's starting value. (In January when we chose our four stocks, it was the PPP stock, which is doubled in value at the beginning of the cycle.) I've never been a huge fan of doubling up on positions because of the increased risk this takes on, but there's no denying that it can have an exaggerated influence on portfolio returns. And when that exaggeration is to the upside as it was today, it makes a Fool's smile just a little broader.

More important than the effect of over-weighting any stock, though, AT&T has once again demonstrated the classic pattern for a high-yield Dow Dog. The portfolio picked up the stock in January while it was still losing ground -- bad luck, perhaps. But in holding on to AT&T patiently, the discipline of this mechanical approach is being rewarded again. AT&T is now showing a decent gain for 1997 and looks to be promising nice prospects for the future.

What looked like a poor investment six months ago has pulled itself out of the Slough of Despond and is back on the Path to the Celestial City. Let's hope temptation doesn't pull it from the path again any time soon. Fool on!

TODAY'S NUMBERS
Stock  Change   Last
--------------------
T    +3  7/8   52.50
GM   -1  3/16  61.38
CHV  -1  1/8   82.56
MMM  -  15/16  94.13

           
                  Day   Month    Year
        FOOL-4   +2.41%   2.74%  22.81%
        DJIA     -0.62%   2.80%  18.65%
        S&P 500  -0.84%   2.58%  26.66%
        NASDAQ   -0.85%   0.43%  23.97%

    Rec'd   #  Security     In At       Now    Change

   1/2/97  153 Chevron       65.00     82.56    27.02%
   1/2/97  479 AT&T          41.75     52.50    25.75%
   1/2/97  120 3M            83.00     94.13    13.40%
   1/2/97  179 Gen. Motor    55.75     61.38    10.09%


    Rec'd   #  Security     In At     Value    Change

   1/2/97  479 AT&T       19998.25  25147.50  $5149.25
   1/2/97  153 Chevron     9945.00  12632.06  $2687.06
   1/2/97  120 3M          9960.00  11295.00  $1335.00
   1/2/97  179 Gen. Motor  9979.25  10986.13  $1006.88


                             CASH   $1345.75
                            TOTAL  $61406.44