<THE FOOLISH FOUR>

Foolish Four Report
by Robert Sheard

LEXINGTON, KY. (April 13, 1998) -- Indulge me today. I often write about the Foolish Four, the mutual fund industry, and accountability. I've also been known to write about investing in terms of sports like golf and baseball. Today I'm going to combine all of that and write about investing, accountability, and golf.

For a long time I've been bugged by the Sony World Golf Rankings. You know a system is busted when it ranked Greg Norman as the world's best player during a stretch when he was having trouble making the cut much of the time. Eventually replacing Greg Norman in Sony's rankings was Tiger Woods, but even that was a questionable choice for the world's best golfer. Yes, he re-wrote the record book in the 1997 Masters a made obscene amounts of money, but after the Masters he had a very poor showing in the remaining three majors of 1997 and in the Ryder Cup. Should he be #1? I don't think so. Would you rate a mutual fund #1 that won the parade one year and then trailed the market for the next three? I don't think so.

So I devised my own World Golf Ranking system, based solely on the performance of the players in the most recent four major professional championships: the Masters, the U.S. Open, the British Open, and the P.G.A. Championships. In my book, the player who performs the best in the majors is the best player in the world. Forget reputation, forget endorsements -- lay it on the line. When the best players gather together, let's see who really performs. You'll be surprised, believe me.

It's the same with investing. A single stock performance or a single period for a mutual fund may get a lot of attention, but how does the stock or fund fare over a more realistic test? There's a lot of noise made in the media about whatever fund topped its category last year. But if that stellar performance is the only time in five years the fund's beaten the market, big deal. I don't want my money in it, do you?

Believe it or not, the Sheard World Golf Rankings sport Jim Furyk as the #1 player, including the 1998 Masters concluded yesterday. I hear golf fans now, "but what has he won?" In the last four majors, he's never collected the winner's check or trophy, that's true. But in all four of the majors in the last twelve months, he's placed in the top five. No one else can even come close to saying that. My ranking system credits each player with points based on his final position in the four majors. The winner of each event gets 50 points, runner up 49, down to the 50th place player with a single point.

So the maximum one player can achieve, should he win all four tournaments, is 200 points. Furyk, without winning any of the four majors, amassed an impressive 185 points. His worst showing was last year's P.G.A., where he finished a lowly fifth. The bum!

The four winners? Yesterday's winner, Mark O'Meara, is tenth overall with 116 points. P.G.A. winner Davis Love III is fourth with 144 points. British Open champion Justin Leonard is tied for second with Colin Montgomerie (another non-winner) with 157 points. And reigning U.S. Open champ Ernie Els is fifth with 126 points.

Other "reputation" golfers? Greg Norman's 35th, with just 53 points. Nick Faldo is (gulp) 106th, with only 3 points. He was 48th in last year's U.S. Open and didn't even make the cut in any of the other three championships.

I realize I've strayed away from investing today, but not all that much. When you look at a golfer as if he were a portfolio, which is more important -- flash and P.R., or tangible results? Jim Furyk and Colin Montgomerie have yet to nail down a major title, that's true, but there's no denying that they're virtually always high on the leader board, putting in top performance after top performance. Some of the best strategies, stocks, even mutual funds are the same way. They may not get the glowing press coverage, but over the long haul they consistently sit among the leaders. Give me a Jim Furyk portfolio any day.

Current Dow Order | 1998 Dow Returns

[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   ---       50.63 
 IP   +2 13/16  51.00 
 MO   -   9/16  39.94 
 EK   +2 15/16  67.00 
 
 
                    Day   Month    Year 
         FOOL-4   +2.36%   2.45%   9.42% 
         DJIA     +0.19%   2.41%  13.96% 
         S&P 500  -0.09%   0.72%  14.35% 
         NASDAQ   +0.26%  -0.59%  16.21% 
  
     Rec'd   #  Security     In At       Now    Change 
  
  12/31/97  289 Int'l Pape    43.13     51.00    18.26% 
  12/31/97  291 Union Carb    42.94     50.63    17.90% 
  12/31/97  206 Eastman Ko    60.56     67.00    10.63% 
  12/31/97  276 Philip Mor    45.25     39.94   -11.74% 
  
  
     Rec'd   #  Security     In At     Value    Change 
  
  12/31/97  289 Int'l Pape 12463.13  14739.00  $2275.88 
  12/31/97  291 Union Carb 12494.81  14731.88  $2237.06 
  12/31/97  206 Eastman Ko 12475.88  13802.00  $1326.13 
  12/31/97  276 Philip Mor 12489.00  11022.75 -$1466.25 
  
  
                              CASH    $415.96 
                             TOTAL  $54711.59