<THE FOOLISH FOUR>

It's Not Working!
by Ann Coleman
(TMF AnnC)

Reston, VA. (Oct. 9, 1998) -- I often get notes from readers who are concerned about a particular stock that doesn't seem to be keeping up with the rest, or a whole set of stocks that is lagging the market, or one company has just announced bad news, or been downgraded, or failed to meet earnings expectations, etc., etc.

The answer is always the same: It's your money and your portfolio; you may do what ever seems best to you, but if your intention is to follow the Foolish Four strategy exactly, then the strategy calls for holding those stocks for at least a year.

Last summer I (and Robert, and anyone else whose name was associated with the Foolish Four) got lots of mail saying, in effect, this stock or that is supposed to go up 22% a year and it's up more than that now, should I sell? They got the answer above. Those who decided to stick with the strategy may be making wax dolls in my image right now. (Ah, that explains the backache -- I thought it was the 14 hour days!)

I know I have said this before, but it bears repeating: There is no crystal ball. All we know is what the strategy has done in the past, and even that gives us no clue as to what will happen in the near term. (Whether or not it gives us a clue as to the long term is also open for discussion, but our premise is that even if the past results are not a predictor of future results, they are a better clue than tea leaves. And better than many professional stock pickers' results!)

If you look into the Foolish Four history, every situation we encounter now has occurred before and turned out different each time.

There are years where the Foolish Four lagged the market for months before surging ahead in the last quarter, and years where it started off behind and just flat out never went anywhere. There are years where it raced ahead early only to fall back and end up losing to the Standard & Poor's 500 Index. There are years where it leapt ahead early and kept on going to finish up with a monster gain. And there is every variation in between.

If it's not working, there is only one answer: This is a long-term strategy. Think long-term.

Current Dow Order | 1998 Dow Returns

10/09/98 Close
Stock  Change   Last 
 -------------------- 
 UK   -   7/16  40.88 
 IP   +1 13/16  46.00 
 MO   -   1/8   47.63 
 EK   +2        82.06 
 
 
                    Day   Month    Year 
         FOOL-4   +1.40%   1.04%  11.99% 
         DJIA     +2.17%   0.73%  -0.11% 
         S&P 500  +2.59%  -3.21%   1.43% 
         NASDAQ   +5.17% -11.89%  -4.96% 
  
     Rec'd   #  Security     In At       Now    Change 
  
  12/31/97  206 Eastman Ko    60.56     82.06    35.50% 
  12/31/97  289 Int'l Pape    43.13     46.00     6.67% 
  12/31/97  276 Philip Mor    45.25     47.63     5.25% 
  12/31/97  291 Union Carb    42.94     40.88    -4.80% 
  
  
     Rec'd   #  Security     In At     Value    Change 
  
  12/31/97  206 Eastman Ko 12475.88  16904.88  $4429.00 
  12/31/97  289 Int'l Pape 12463.13  13294.00   $830.88 
  12/31/97  276 Philip Mor 12489.00  13144.50   $655.50 
  12/31/97  291 Union Carb 12494.81  11894.63  -$600.19 
  
  
                              CASH    $754.73 
                             TOTAL  $55992.73