Investing For Growth

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Tuesday, December 10, 1996
The Daily IFG Report FOOL GLOBAL WIRE by Robert Sheard (MF DowMan) LEXINGTON, Kentucky (December 10) -- With the work we've been doing on new growth-model screens, a question often arises concerning the distinction I make between updating and re-balancing. And since I do mean those terms as separate actions, let's look at the differences. Updating simply means selling stocks no long on the list and taking those funds and spreading them evenly over the new purchases. The stocks you're carrying over from one period to the next are not affected by the updates. So if after your holding period, you sell Xerox, Best Buy, and Woolworth, but hold on to Disney and Microsoft, an update won't affect your holdings in Disney and Microsoft. You would simply take the proceeds from the other three and split that money evenly for your new three stocks. Re-balancing means you want all of your stocks with equal-dollar amounts at the beginning of the period, so even stocks you're carrying over from a previous period are adjusted. So if you rebalance when you update, not only would you sell Xerox, Best Buy and Woolworth, but you'd also buy more or sell a few shares of Disney and Microsoft so that they equal the amount you're about to put into Netscape, Starbucks and Gateway 2000. It's not crucial that you rebalance every time you update your holdings, but I believe it helps to do so periodically in order to keep any one stock from becoming too large a percentage of your entire portfolio (which, as we discovered in the IFG portfolio last year with Micron Technology and with U.S. Surgical in the early 1990s, can be devastating if that one stock suddenly crashes). So choose an appropriate mix of updating and re-balancing to meet your investing style and the size of your portfolio (to keep trading costs reasonable). Stay Foolish!	The Current IFG Stocks Nike <% if gsSubBrand = "aolsnapshot" then Response.Write("(NYSE:NKE)") else Response.Write("(NYSE:NKE)") end if %> Green Tree Financial <% if gsSubBrand = "aolsnapshot" then Response.Write("(NYSE:GNT)") else Response.Write("(NYSE:GNT)") end if %> Nautica Enterprises <% if gsSubBrand = "aolsnapshot" then Response.Write("(NASDAQ:NAUT)") else Response.Write("(NASDAQ:NAUT)") end if %> Three Com <% if gsSubBrand = "aolsnapshot" then Response.Write("(NASDAQ:COMS)") else Response.Write("(NASDAQ:COMS)") end if %> Western Digital <% if gsSubBrand = "aolsnapshot" then Response.Write("(NYSE:WDC)") else Response.Write("(NYSE:WDC)") end if %> Sun Microsystems <% if gsSubBrand = "aolsnapshot" then Response.Write("(NYSE:SUNW)") else Response.Write("(NYSE:SUNW)") end if %> Compaq Computer <% if gsSubBrand = "aolsnapshot" then Response.Write("(NYSE:CPQ)") else Response.Write("(NYSE:CPQ)") end if %> Tellabs <% if gsSubBrand = "aolsnapshot" then Response.Write("(NASDAQ:TLAB)") else Response.Write("(NASDAQ:TLAB)") end if %> ADC Telecom <% if gsSubBrand = "aolsnapshot" then Response.Write("(NASDAQ:ADCT)") else Response.Write("(NASDAQ:ADCT)") end if %> Claire's Stores <% if gsSubBrand = "aolsnapshot" then Response.Write("(NYSE:CLE)") else Response.Write("(NYSE:CLE)") end if %> Last Update: 12/06/96
Today's IFG Numbers Stock Change Bid ------------------- COMS -1 5/8 78.50 TLAB -2 3/4 42.50 SCIS - 1/4 54.88 ADCT -2 33.75 MIR - 3/8 22.88 KO - 5/8 49.63 NAUT - 5/8 32.50 GNT + 1/2 39.50 NKE -1 56.00 CLE - 7/8 14.88 Day Month Year History IFG -2.61% -0.39% 12.53% 4478.36% DJIA +0.14% -0.74% 26.50% 681.00% S&P 500 -0.30% -1.25% 21.37% 601.78% NASDAQ -0.28% 1.54% 24.75% 786.74% Rec'd # Stock In At Now Change 7/8/95 7732 TLAB 24.00 42.50 77.08% 7/5/96 4562 COMS 44.38 78.50 76.90% 7/5/96 5077 SCIS 39.88 54.88 37.62% 10/4/96 6250 ADCT 32.00 33.75 5.47% 10/4/96 4001 KO 50.00 49.63 -0.75% 7/5/96 8756 MIR 23.13 22.88 -1.08% 10/4/96 6063 NAUT 33.00 32.50 -1.52% 10/4/96 4879 GNT 41.00 39.50 -3.66% 10/4/96 3218 NKE 62.13 56.00 -9.86% 10/4/96 9642 CLE 20.75 14.88 -28.31% Rec'd # Stock In At Value Change 7/5/96 4562 COMS 202438.75 358117.00 $155678.25 7/8/95 7732 TLAB 185568.00 328610.00 $143042.00 7/5/96 5077 SCIS 202445.38 278600.38 $76155.00 10/4/96 6250 ADCT 200000.00 210937.50 $10937.50 10/4/96 4001 KO 200050.00 198549.63 -$1500.38 7/5/96 8756 MIR 202482.50 200293.50 -$2189.00 10/4/96 6063 NAUT 200079.00 197047.50 -$3031.50 10/4/96 4879 GNT 200039.00 192720.50 -$7318.50 10/4/96 3218 NKE 199918.25 180208.00 -$19710.25 10/4/96 9642 CLE 200071.50 143424.75 -$56646.75 CASH $672.07 TOTAL $2289180.82 Transmitted: 12/10/96

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