By
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To err is human; to really screw things up takes a harried Fool. It was pointed out to me that last week's correction for the final BSP 30 stock was incorrect. Instead of GTE <% if gsSubBrand = "aolsnapshot" then Response.Write("(NYSE: GTE)") else Response.Write("(NYSE: GTE)") end if %>, the final BSP stock should be Bell Atlantic <% if gsSubBrand = "aolsnapshot" then Response.Write("(NYSE: BEL)") else Response.Write("(NYSE: BEL)") end if %>, which has a higher market cap than GTE. Soon the change will be academic, when Bell Atlantic completes its acquisition of GTE, forming a new company, to be called Verizon.
For starters, this CD player holds 200 discs. Yep, that's about a week of continuous music, without repeating a single tune. I can group my music into categories, ranging from classical to jazz to a category I'll just call "never to be played around small children or pets." Once grouped, I can play the discs from a particular genre randomly for hours on end. It's as if I owned my own personal radio station -- without commercials, or those crass rush-hour jokes (always followed by a little forced laughter from a group of three), or those contests which invariably are won by the same screaming 11th caller ("OMIGOD, you're KIDDING!").
I love my new compact disc player! I can program it to play specific tracks in any specific order. I can exclude tracks from any CD that I won't ever want to hear again. (Which reminds me, what was George Martin thinking when he inserted "Within You Without You" into the Beatles' Sergeant Pepper album?)
The remote control included with the disc player lets me use all these features without ever leaving my easy chair. Just click and program!
Of course, it takes awhile to learn how to use these fabulous features. The 26-page instruction booklet helps. It was quite an undertaking to log all the CD titles into the player, categorizing each disc by music style. With only 13 digits available for each entry, some creative abbreviations were required. (Joe Jackson's Jumping Jive by necessity became JACKSON JJIVE.)
It also gets a little tricky when I want to find a specific CD, or a track on that disc. Now that 200 discs are stored in the player, rather than in their original cases, it's a bit of a chore to find the liner notes or hunt for those lyrics as I listen.
I sometimes run into difficulties when I need to take a disc out to listen elsewhere -- in a portable CD player or the car, for instance. The original case isn't readily available, and once removed, it's not exactly easy finding the original slot in the player.
To help solve some of these problems, I've created a database of the CDs on my computer, complete with CD slot number, artist name, title of the disc, and musical group. Unfortunately, when I got my new computer recently, the database program was on the old one. I haven't quite gotten around to transferring it yet.
There's one problem that may be coming down the line. My collection has been expanding and now has almost reached the 200 CD-limit of the player. I'm going to have to figure out a system to be able to rotate the extra discs in and out of the player, and be able to make the necessary changes in my database. Of course, when the new CDs are rotated into the player, I'll have to reprogram the disc information.
Naturally, given all these terrific features, my new 200-CD player cost a bit more than the five-CD player that I saw at Best Buy <% if gsSubBrand = "aolsnapshot" then Response.Write("(NYSE: BBY)") else Response.Write("(NYSE: BBY)") end if %>. The sales representative also informed me that my new CD player might malfunction more than the older models, so I sprung for the extended warranty plan, which includes free cleaning at the store. It will take me only a handful of hours to disconnect the player, bring it in to the store, leave it there, pick it up later when it's refurbished, and reconnect it.
Come to think of it, I'm spending a heck of a lot of time and money on my new CD system, just trying to maintain it. It kind of makes me yearn for the simpler days when I could snap in five discs and listen for hours at a time. Now that I think of it, I rarely listen to more than five hours of straight music.
I hate my new compact disc player.
Which brings me around (finally!) to my investments. Investing can be a lot like CD players. Sure, it can be fun choosing among thousands of stocks to find just the right ones. By tweaking our databases, using all the "bells and whistles" now available to the individual investor, the returns can be quite rewarding.
Of course, like my new CD player, there can be quite a bit of maintenance involved with choosing stocks. Ideally we should peruse quarterly earnings reports, SEC filings, press releases, annual reports, the message boards. There are Flow ratios and gross margins to calculate. Like the extended warranty plan for my CD player, the increased complexity often (although not always) comes with higher costs. There's little doubt the process can be time-consuming.
Sometimes just a handful of good stocks, like a five-disc CD player, is all you need. With a Foolish Four or Beating the S&P strategy, an hour or so each year can be sufficient to find a group of world-class companies with a great long-term track record. Throw in a handful of Foolish growth stocks, perhaps using a mechanical strategy like the Keystone 100, and you're set.
The use of simple mechanical strategies can free up time for other pursuits. And our time, like land, is something they just ain't making any more of.
Beating the S&P year-to-date returns
(as of 04-04-00):
Bank One <% if gsSubBrand = "aolsnapshot" then Response.Write("(NYSE: ONE)") else Response.Write("(NYSE: ONE)") end if %> +13.0%
PepsiCo <% if gsSubBrand = "aolsnapshot" then Response.Write("(NYSE: PEP)") else Response.Write("(NYSE: PEP)") end if %> +3.8%
Ford Motor Co. <% if gsSubBrand = "aolsnapshot" then Response.Write("(NYSE: F)") else Response.Write("(NYSE: F)") end if %> -7.0%
Bank of America <% if gsSubBrand = "aolsnapshot" then Response.Write("(NYSE: BAC)") else Response.Write("(NYSE: BAC)") end if %> +9.0%
Fannie Mae <% if gsSubBrand = "aolsnapshot" then Response.Write("(NYSE: FNM)") else Response.Write("(NYSE: FNM)") end if %> -5.9%
Beating the S&P +2.6%
Standard & Poor's 500 Index +1.7%
Compound Annual Growth Rate from 1-2-87:
Beating the S&P +24.1%
S&P 500 +17.8%
$10,000 invested on 1-2-87 now equals:
Beating the S&P $172,200
S&P 500 $86,900