<THE FOOLISH FOUR>

Foolish Four Report
by Robert Sheard

LEXINGTON, KY. (March 20, 1998) -- This year's Foolish Four millstone, Philip Morris <% if gsSubBrand = "aolsnapshot" then Response.Write("(NYSE: MO)") else Response.Write("(NYSE: MO)") end if %>, was able to shed a little of its weight today after an Indiana jury gave the tobacco industry an extremely favorable verdict in what may well prove to be a precedent-setting case.

Mildred Wiley, who died at age 56 reportedly of lung cancer despite being a non-smoker, was the second big test for claims against the tobacco industry regarding second-hand smoke. (The first was settled in October in Florida.)

Wiley was a nurse for 17 years in the psychiatric and hospice wards of Veterans Hospital in Marion, Indiana. The claim brought by her family against the tobacco industry was that constant exposure to excessively high amounts of second-hand smoke in the hospital wards caused her lung cancer.

The tobacco industry's rebuttal claims that the doctor misdiagnosed Wiley's cancer and that she originally suffered from pancreatic cancer that ultimately spread to the lungs. The jury ruled that the tobacco industry was not liable for Wiley's death.

Analysts believe this may well be a signal that litigation in future second-hand smoke cases will prove difficult. With Wiley being such an unusually sympathetic character, and the fact that the jury was still unpersuaded to rule against the industry, future juries having this case presented as a precedent may be less likely to rule against big tobacco.

I don't intend to comment on the ethics of the great debate about tobacco companies; that's between you and your mirror. But from a purely amoral perspective, it's a business victory for Philip Morris and the stock might well prove stronger than we anticipated going into 1998. Perhaps it'll become another AT&T <% if gsSubBrand = "aolsnapshot" then Response.Write("(NYSE: T)") else Response.Write("(NYSE: T)") end if %> from 1997's portfolio and add a section to the chapter in the Dow Dogs biography, Stocks No One Wanted But Everyone Should Have. Fool on!

Go Kentucky!

[Robert Sheard is the author of the forthcoming book, The Unemotional Investor, due out from Simon & Schuster on May 12. To pre-order your copy, please visit Amazon.com, where it's available at a discounted price.]

TODAY'S NUMBERS
Stock  Change   Last 
 -------------------- 
 UK   +1        48.44 
 IP   -   1/8   49.88 
 MO   +1  3/4   43.19 
 EK   +   5/16  62.75 
 
 
                    Day   Month    Year 
         FOOL-4   +1.52%   1.64%   6.87% 
         DJIA     +1.17%   4.22%  12.62% 
         S&P 500  +0.86%   4.75%  13.26% 
         NASDAQ   -0.60%   1.05%  13.93% 
  
     Rec'd   #  Security     In At       Now    Change 
  
  12/31/97  289 Int'l Pape    43.13     49.88    15.65% 
  12/31/97  291 Union Carb    42.94     48.44    12.81% 
  12/31/97  206 Eastman Ko    60.56     62.75     3.61% 
  12/31/97  276 Philip Mor    45.25     43.19    -4.56% 
  
  
     Rec'd   #  Security     In At     Value    Change 
  
  12/31/97  289 Int'l Pape 12463.13  14413.88  $1950.75 
  12/31/97  291 Union Carb 12494.81  14095.31  $1600.50 
  12/31/97  206 Eastman Ko 12475.88  12926.50   $450.63 
  12/31/97  276 Philip Mor 12489.00  11919.75  -$569.25 
  
  
                              CASH     $77.19 
                             TOTAL  $53432.63