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Author: MrJones One star, 50 posts Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: of 76418  
Subject: Re: Doubling Up? Date: 4/15/1998 1:15 PM
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SnootFool wrote:

< The Motley Fool Investment Guide does recommend buying the Foolish Four in the following
order: 2,2,3,4,5, thus doubling up on #2. This stock, referred to as the PPP (penultimate profit
potential, or something close to it) by Mike O'Higgins, who invented (more or less) the Beat The
Dow strategy, supposedly does extremely well, historically speaking. However, when you split your
nest egg as indicated you end up with 40% of your $ in one stock, which TMF Sheard thinks is not
Foolish. (He cites Intl Paper as a PPP which turned to be a dog rather than a Dog, if you get my
meaning.) So, the current Foolish Four does NOT involve doubling up.
BTW, in another change from the book, the number 1 stock (the UPP- ultimate etc,etc) is no
longer discarded as a matter of course. The UPP (the cheapest BTD 10) is only kicked out if it
ALSO is the highest dividend yielder. Check out the Foolish Four (formerly Daily Dow) page
earlier this year for the changes.
Hope this helps>

And I might add that this year it looks like the new
approach would have saved me lots of pain. My doubling
up (last September) was on ... Phillip Morris! My
returns are about 3%, with the drag all being caused
by the one stock I doubled up on. Using the new
approach the returns would currently be around
7%. Of course, both numbers sadly lag the S&P for
the same period, but I'll use the fact that I'm
in an IRA to switch my holding period to starting
in January every year. Recent research seems to
show that there are abnormally large returns awaiting
those whose start their DDA approaches in January.

MrJones


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