Monday, December 22, 1997


The Daily Dow
by Robert Sheard

ST. PETERSBURG, FL. (Dec. 22, 1997) -- Let me get this straight. Here I am in Florida the week of Christmas. It's 72 degrees and there's just a slight cooling breeze. Back home in the Bluegrass, apparently the weather's turning a bit nasty. I'm visiting my family, haven't seen them in a little more than a year. And I'm supposed to write something coherent about the stock market? Ha!

Seriously, though, part of the beauty of Foolish investing, especially with the Dow Approach, is that one can avoid becoming a slave to one's portfolio. The goal of a Fool is to invest well, yes, but also to have a life away from Wall Street. When life is more important than your portfolio (which should probably be the case far more often even than I'm able to muster), you should recognize and act on those priorities.

Visit with your family. Enjoy the sun in December if you're lucky enough to get the chance. Celebrate the holidays. Turn off the cable television and the real-time quote machine (heck, turn those off permanently). Forget about checking your quotes for a day or two this week. Live, Fool. I plan to.

If you absolutely can't bear not to look, it was another strong day for AT&T <% if gsSubBrand = "aolsnapshot" then Response.Write("(NYSE: T)") else Response.Write("(NYSE: T)") end if %>, which is supporting the Foolish Four because of its double weighting. In fact, today's return was so strong that the Foolish Four portfolio for the year has finally caught the last of the major indices (the S&P 500 Index) and leads all of our benchmarks. AT&T is exactly the reason why I suggest you forget your investments and live your life. For the first three months of the year, AT&T was agonizing for Dow investors, continuing its plunge and looking like the worst thing down the pike since Woolworth <% if gsSubBrand = "aolsnapshot" then Response.Write("(NYSE: Z)") else Response.Write("(NYSE: Z)") end if %> spanked Dow Approach investors in 1994.

But since April, AT&T has not only rebounded, it has become one of the strongest Dow stocks for the entire year, doubling in value and rewarding the patient Dow Approach users who let things alone for time to do its magic. Does it work perfectly every time? Of course not. In fact, another Dow stock this year -- International Paper <% if gsSubBrand = "aolsnapshot" then Response.Write("(NYSE: IP)") else Response.Write("(NYSE: IP)") end if %> -- has performed poorly after a very promising start. But over long periods (decades, not months), the approach has worked so consistently that a patient and disciplined investor can use it with relatively low levels of maintenance and stress, allowing just the kind of laid-back attitude I'm adopting this week while I'm out of town.

Hey, your portfolio's going to go up and down; that's a fact of equity investing. Let it. If you're following a great strategy like the Dow Approach, do you really believe you're going to be worse off in a decade? If you do, then stocks aren't for you. If you're convinced you'll be better off a decade from now, don't sweat the little stuff in between. Fool on!

TODAY'S NUMBERS
Stock  Change   Last
--------------------
T    +1  1/4   59.19
GM   -   5/8   63.56
CHV  -  13/16  74.06
MMM  +1  1/16  85.94

           
                  Day   Month    Year
        FOOL-4   +2.74%   3.16%  30.06%
        DJIA     +0.81%  -0.05%  21.26%
        S&P 500  +0.73%  -0.18%  28.75%
        NASDAQ   +0.48%  -4.28%  18.67%

    Rec'd   #  Security     In At       Now    Change

   1/2/97  479 AT&T          41.75     63.94    53.14%
   1/2/97  153 Chevron       65.00     75.19    15.67%
   1/2/97  179 Gen. Motor    55.75     60.00     7.62%
   1/2/97  120 3M            83.00     84.25     1.51%


    Rec'd   #  Security     In At     Value    Change

   1/2/97  479 AT&T       19998.25  30626.06 $10627.81
   1/2/97  153 Chevron     9945.00  11503.69  $1558.69
   1/2/97  179 Gen. Motor  9979.25  10740.00   $760.75
   1/2/97  120 3M          9960.00  10110.00   $150.00


                             CASH   $2051.96
                            TOTAL  $65031.71