<FOOLISH FOUR PORTFOLIO>

Celebrating Snow
and avoiding snow jobs

by Ann Coleman (TMF [email protected])

Reston, VA (January 8, 1999) -- Today I want to celebrate snow. Virginia has been bereft of snow for the last two years as El Nino threw warm weather up the Eastern Seaboard. (I know, I know, you're sick of people blaming everything on El Nino! Actually, the lack of snow was my fault, and I should take responsibility for it. I'm sorry, kids. More snow days this year, I promise.)

Today we have a lovely little blanket -- more of a Polartec throw, really -- of snow on the ground. It hides all the leaves that haven't been raked yet and the litter that invariably gets deposited when the "wet weather creek" behind my house goes back to being a ditch. And it's quiet, deeply quiet, and still. The snow is muffling all the tiny sounds you don't even hear until they aren't there. Birds and rodents digging through the leaves, cat bells, cars, even the wind is quiet.

The weather did a snow job on us. I remember my first investing snow job. It wasn't quite so pleasant. I ended up investing $1000 in a mutual fund with an 8% load because the salesman, who had come all the way to my house to help me start an investment plan, explained that the load was "worth it." "You get what you pay for," he explained when I mentioned that I had heard of some "no load funds." He was right. I paid for a snow job, and I got it.

The fund promptly dropped (the market can do that at any time), and when it was finally back to break-even, I sold it. That time I did a snow job on myself. I sold because it had gone down when I expected it to go up. I didn't know why it had gone down or why it turned around and went back up or what the market as a whole was doing during that time period. I'm not sure I even knew what kind of companies it invested in, although the word "growth" was tossed around like we all knew what it meant.

Our Foolish Four portfolio is doing great, eh? International Paper <% if gsSubBrand = "aolsnapshot" then Response.Write("(NYSE: IP)") else Response.Write("(NYSE: IP)") end if %> finally moved the right way, and Caterpillar <% if gsSubBrand = "aolsnapshot" then Response.Write("(NYSE: CAT)") else Response.Write("(NYSE: CAT)") end if %> is plowing straight uphill! Boy, we really made a great decision to invest in the Foolish Four, didn't we? We're up somewhere around 9% in just two weeks -- almost triple the Standard & Poor's 500 Index. Whee, doggies!

Sound like another snow job? Well, it is if you are taking this rally too seriously. The market is exuberant these days, and, although it is great to be beating the S&P again, short-term moves like this are meaningless. It makes no more sense to celebrate them than to start shopping at thrift stores when the market goes down.

So let's celebrate snow instead -- nice, gentle 3 inch snow storms, anyway. Midwesterners can celebrate something else if they prefer. Hot chocolate, maybe.

Fool on and prosper!

Today's Stock Lists | 1998 Dow Returns

01/08/99 Close
Stock  Change   Last
--------------------
CAT  +2  1/16  51.00
JPM  +1  3/16  114.19
MMM  +   5/8   77.38
IP   +3  3/16  45.75

                   Day   Month    Year   History
        FOOL-4   +3.29%   7.64%   7.64%   9.24%
        DJIA     +1.11%   5.03%   5.03%   4.61%
        S&P 500  +0.43%   3.74%   3.74%   5.13%
        NASDAQ   +0.79%   6.92%   6.92%   8.39%

    Rec'd   #  Security     In At       Now    Change

 12/24/98   24 Caterpilla    43.08     51.00    18.38%
 12/24/98    9 JP Morgan    105.51    114.19     8.22%
 12/24/98   14 3M            73.57     77.38     5.17%
 12/24/98   22 Int'l Pape    43.55     45.75     5.05%


    Rec'd   #  Security     In At     Value    Change

 12/24/98   24 Caterpilla  1034.00   1224.00   $190.00
 12/24/98    9 JP Morgan    949.62   1027.69    $78.07
 12/24/98   14 3M          1030.00   1083.25    $53.25
 12/24/98   22 Int'l Pape   958.12   1006.50    $48.38


                             Cash     $28.26
                            TOTAL   $4369.70

</FOOLISH FOUR PORTFOLIO>