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Show Sunday, August 6, 2000 What Is This Thing Called The Motley Fool? The Motley Fool The Dow Scoop What is “the Dow”? — FR., Baton Rouge, La. RememberShakespeare? Remember“As You Like It”? In Elizabethan days, Fools were the only people who could get away with telling the truth to the King or Queen. The Motley Fool tells the truth aboutinvesting, Created in 1896 by Charles Dow, who also established The WallStreet Journal, the Dow Jones industrial average is an index of 30 major American companies. ‘These bluest of the blue, ae include Boeing, General Our Mission: To Inform, to Amuse, and to Help You Make Money The Fool School Cashing In Insurance Money-Saving Tips In the 1960s, I bought “20-year paid-up”life insur- Procter & Gamble, IBM, Interational 4 , CocaCola, McDonald's, Merck, American Express, Disney, Wal-Mart, ExxonMobil and more. In 1999, the Dow got a makeover when Sears, Union Carbide, Goodyear ‘Tareand Chevron were removed, so that Home Depot, Microsoft, Intel and SBC Communications could be added. ance policies on my wife, children and myself. About 25 years later, I realized that these policies were just lying around with inflation eating them up. With muchdifficulty from the insurance company (1 was told that no one would cashin a policy for 50 cents on the dollar), I cashed them in and putthe proceeds in a growth mutual fund. Now,15 years later, I have at least twice the face value ofthe policies, and no onehadto die to get it! — James E. Weddington, Concord, NC. The Fool Responds: Whata greatlesson. There is certainly a place for insurance — to protect income streams. But if your demise won't be a majorfinancial burden to your loved ones, you maynotneed life insurance. Too many peopleincorrectly think oflife insurance policies as investments. They are simply protection. And as you noted, you do have to die to benefit from them. Tam tying to find a publication that recommends stocks under $5 because I have only $5,000 to invest. Can you help? — R.L., Vacaville, Calif. Werecommend that you not follow recommendations, but instead do your own research.It is hard to know what any given guru’strack record reallyis. $ Do you have an embarrassing lesson learned the hard way? Boilit down to 100 words (orless) and send it to The Motley Fool c/o My Dumbest Investment. Got one that worked? Submit to My Smartest Investment. If we print yours, you'll win a Fool’s cap! NameThat Company (Gurus and Fools alike can make mistakes — see below!) Also, considersteering clear of stocks trading for less than $5 each. They are penny stocks. Volatile and extra risky, they tendto be more likely to fail than flourish. You can buy into more established and promising companies with your $5,000, simply buying fewershares. Remember: A $150 stock might be undervalued, while a $3 stock may be overvalued and aboutto crash. | was bom in 1992 and bought by U.S.Robotics in 1995. Ayearlater introduced some groundbreaking computers thatfit in pockets. In 1997, | became a subsidiary of 3Com Corp., but in 1999, 3Com decided to spin meoff. | am the world leader in my niche, with a market share of 68 percent and sales in more than 35 nations. My offerings allow you to check your e-mail on a golf course, surf the Web on ski slope, and look up an address in the middle of a meeting. Thousands of applications have been developed for my products. Who am |? Knowthe answer? nd it to. us with Foolish Trivia on the top and you'll be entered into a drawingfor a nifty prize! Gota question for the Fool? Send it in — see Write to Us WHOOPS!Weapologize for presenting you with a bad math lessonlast week.To calculate the percent change from $133 to $125,this is what you should do (instead of what we said): Suctect $125 from $133 and you'll that there was an decrease. Divide $8 by $133 and you'll get 0.06, meaningthe price fell 6 percent. Thanks to many readers for keeping us on our toes! If you wouldlike to save little more money, consider these tips offered by Fools on our online discussion boards: © Think aboutevery dollar you spend. Makeyourself wait a month before you make most purchases. A month ater, you might not want some things quite as much. © Develop new hobbies and interests that don’t eat up too much money. Take up hiking, for example,or gardening.Start a book club. Consider developing income-producing hobbies, such as woodworking or free-lance writing. © Use your local library more, instead of bookstores. Start a book exchange at work, where colleagues bring in and trade books. * Eat before yougoto the movies, so that you are not tempted to pay $37 for a tub of popcorn. Rent moviesinstead of seeing them at expensive first-run theaters. Go to discount matinee showingsatfirst-run theaters. Reduce,reuse andrecycle. Youcan get a few dollars back when you recycle somethings. Reducing andreusing can also and hopes you'll laughall the pen way to the bank. save some * Consider dropping your cable TV subscription.Atthe very least, drop one or more premium channels. It s Elementary at See what your friends can do for you and what you can do for them. * Toss outthose advertising supplements that pad your Sunday paper unless you really need to buy something. Otherwise you will end up buying a you don’t really need. © Don’t buy magazines regularly at the newsstand. Subscriptions are much cheaper. Better still, read magazines —_— at libraries or online. E-mail friends and relatives sometimesinstead of phoning. © Lower your long-distance phone rates. You should be able to get your carrier to meet or beat the best deals offered by competitors. © Call the folks at your credit card company and negotiate a Investors who follow ScientificAtlanta (NYSE:SFA), maker of set-top boxes for cable TV and interactive services, watched the firm tum in a 145 percent share price gain last year, topped by a 175 percent return so far in 2000. It has beenone of the biggest gainers in the S&P 500 so far this year. It is not magic, however. , itis a _great example of a companysurfing a successful, early stage technology. The main driver for ScientificAtlanta during the past year has _been its Explorer line of digital set-top boxes, which it can’t get into its cable system customers’ hands fast enough. Investors in high-growth industries are accustomed to seeing companies scrambling to keep up with demand, but the set-top market is somewhat unique. Not only has volume growth been driving thetop line for Scientific-Atlanta, butrising averageunit selling prices (or ASPs) haveacted like a harger. Therising ASP trend bucks the typical story line for mature technologies, which is marked by declining prices and improving quality as markets develop and users embrace new technologies en masse.Asa result, a great value creation opportunity has opened up for Scientific-Atlanta. lower interest rate. If they balk, tell them youwill take your business elsewhere. ¢ Establish a regular game night with family or friends, where you play board and card games with each other. © When shampooing,lather up, rinse, and then don’t repeat.. LAST WEEK’S TRIVIA ANSWER | was founded in 1985 and sport more than 23 million members. | gobbled up CompuServe in 1998 and Netscape in 1999. | am the world’s leading Intemet services company, and upon completion of an enormous pending merger, | will be the world’s largest media com pany. Each day| deliver more than 110 million e-mails and 200 million stock quotes. Some brands under my umbrella include ICQ, MapQuest, Digital City, MovieFone, Spinner.com and Winamp.| operate online servicesin 14 countries and in seven languages, more than 4 million non-U.S. me! mbers. My goal is to be available to consumers “anywhere” — through any channel. Who am I? (Answer: America Online) Write to Us! Sorone or nee te roo Dumbest (or Smartest) Investments (upto 1 words), and yourTrivia entries to Posi toole com or a sea mail c/o this newspaper,attn: attn: The Mot- sm y, we can't provide individualfinancial advice. ec eeceoccccceseceesccesessoosces Ccvcccccccccescccccccececees © 2000 The Motley Fool/Dist. by. Universal Piss Syndicate ‘Strategy, Skill Are Secrets _/t Pays to Shop Aroundfor Insurance, Banking SAVINGS GAME To Surviving Sales Slumps accountfees, accordingto the U.S. Public Interest Research Group. In Florida,thefigure is even higher, or nearly $237 a year. Yet most consumers could lower thesefees — and sometimes Weget worked upovergasoline prices and ATM fees. We open ‘THE DALLAS MORNING NEWS: Just about every sales worker knowswhatit’s like whenold customers suddenly stop buying, setting a series of short-term goals. “Shortening their planning cycle and setting daily or weekly goalsis the waythat they can focus windowsratherthan turn on the air conditioning ona hot day to save a buckortwo, andprefer the phone bookto directory assistance, also to save money. Manyof us would spend up to two hoursshoppingto save 50 per- prospects don’t return phonecalls their energy and maketheir moti- and the*new productlineupisn’t takingoff. SalesSlumps happen toeventhe runs the consulting firm Human Dimensions Inc. and is.a part-time lessly waste hundreds, if not thou- marketing instructor at Southern Methodist University and the Uni- expenseseach year and don’t take best salgs workers — even in good economic times. And it can take skill to survive them. Thefirst thing to do, consultants say,-is to conquerthe sinking feeling that comes when monthly commission checks don’t add up to their oldtotals. “It's easy to panic when yousee something drop,” said Steve Simms, +a motivationa! speaker and president of Attitude-Lifter Enterprises. “If you get into worry or fear or discouragement, in the long run-that makes a slumplast longer. ft becomes self-fulfilling. You become worried, and that comes through as you talk to your clients or prospects.” Instead, he and others say,it’s importantto figure out how long the slump will last and develop a strategy based on that evaluation. “The first thing I have done whenI have seen thatsort of thing take place is to quickly get a position on where I am in the industry,” said John Terry, a principal in Churchill, Terry and Associates consulting firm in Dallas. If the entire industry is in a cyclical downturn,“you need to stay the course,” said Terry, who has worked in salesfor 15 years,“Ifyou are the onethat’s in a slump, you need to take a good look around andsee what maybe the cause of this,” he said. Shifts in the marketplace, a competitor's better offering or other firms’ sales gimmicks are amongthe factors that can influence a sales slump.In developing an improvement strategy, sales veterans say, workers need to be ready to makecareer adjustments. Don James, who's been a sales- man for 28 years,said he begins by vation comeup,” said James, who versity of North Texas. It’s also essential for sales people to keep positive attitude dur- ing the slump. Simmsadvises that sales workers double up on the motivation literature when they are battling a slump. And staying busy alsohelps, he said, Workers also musttake a sharp look at their sales skills and analyze them, he said. Simms will sometimes try a new approach. If he has been making most sales calls in person, for example, he will switch to the phone. Maybe something about the product mix — or the wayitis offered — needs to be changed,too, James said. “If the companyis not in tune and doesn't modify its services to meet the new needs of the marketplace, you will get caught behind the curve,” James said. Thelast suggestion — if taken as a prevention rather than a cure — can help prevent slumps, Terry said, “The best way to do that is to continuously re-evaluate what you are doing in the marketplace,” he said. “If you do that, 99 percent of the time, when there is that inevitable slump, you can look around and see your competitors are not doing any better than you are doing.” Free Report reveals how you may be eligible to pay a much smaller ProTel, inc. Utah's oldest and largest “PAY THE IRS PE’ “IES TO SETTLE” prone aM r ene pa ) sands,of dollars in unnecessary the time to shop aroundfor the bestdeal. For example, a survey by Progressive Auto Insurance that found 46 percent of Americans nevershop aroundfor auto insurance to save money,and 36 percent would spendless than an hour doing so. Yet 40 percent would spend up to two hours to save 50 percent on underwear. And 55 percent would open the window rather than the turn on theair, and 79 percent would look up a phone number themselves. I, of all people, will never knock thelittle things that save money. Little things do add up big over time. But as Progressive consumer marketing director Dave Pratt said, “Weall knowthat people are pressed for time, but spending more time shopping for underwearthan auto insurance?” No,it doesn't make sense. A'nationwide study of89,994 consumers by Progressive this year found that premiumsforpoliciesoffering the same coverage varied widely from company to company. The average premium difference, from highest to lowest, was $515 every six months. Progressive, which doesn’t alwaysoffer the lowestprice, gives consumers free quotes from up to eliminate them altogether — sim- ply by shopping aroundortaking their businessto credit unions or ss HUMBERTO CRUZ four leading companies,usually includingState Farm andAllstate, at its Web site, www.progressive .com,orits toll-free number, 800288-6776. You should also check direct insurers such as GEICO, whichoffered the best deal for my car insurance but must earn my business every timeit comes up for renewal. Differences in premiums also can be substantial when shopping for life and homeowners’ insurance. But consumers don't always take the time to compare.Intuit, the makerof Quickenfinancial software,esti many consumers pay up to $200 more a year than necessary on in- surance, Amongthe manyplaces where you can get quotes fordifferent types of insurance are Quicken’s Website at www.quicken.com and Microsoft's MSN Money Central at moneycentral.msn.com. Anotherstatistic, from Jupiter Communications: Americans spend an average of $190 a year on checks and postage to paybills. But manybanksand several brokerage firms offer free or very low-costelectronic bill paying services. Here is more moneywasted: Americans pay an average ofa $217 a year in bank checking. money market mutual funds that offer free check writing: In manycases, these low-fee or no-fee alternatives also pay considerably higherinterestrates. Robert Heady,founding publisher of Bank Rate Monitor, estimates American consumers keep more than $1.2 trillion oftheir hardearned moneyin whathecalls “dust bin accounts,” such as bank savings accounts with very low yields. Butif you could earn just2 percentage points more on a $10,000 deposit, you would put an extra $200 a year in your pocket. You can doit, without giving up Federal Deposit Insurance Corporation protection, by shopping Sejentific-Atlanta Exactly when and for what reasonthis trend will revert back to the norm is the key question here. Eventually, the technology barriers providing today’s notable pricing advantagewill give way as the market expands and more competitors siphon off profits. Butin the interim, Scientific-Atlanta’s current economicsoffer a valuable lesson for growth-oriented investors. aroundandbeingwilling to considerout-of-state and Internet banks. I no longer have a brick-andmortar bank, for example. Toan- ~ * swer many whoasked afterI first mentioned it, I still do all my banking at everbank.com (888882-3837). I pay no fees and get paid close to 6 percentinterest. I also getfree online bill paying,a ° no-fee ATM/debit card for cash withdrawals and free postage-paid © envelopes for deposits by keeping an average monthly balance ofat Jeast $1,500. To keep tabs on the best bank deals anywhere in the country,check out regularly the Website www.bankrate.com. Do all this and you should makeup whatthe higher gas prices are costing you. And,definitely, you won’t have to worry about your underwear. Humberto Cruz lives in Coral Springs, Fla, Write him c/o Tribune Media Services, 435 N. Michigan Ave., Suite 1400, Chicago, IL 60611. Send e-mail to HCruz5040@aol.com. ity! Prim SALT LAKE CITY CREDIT UNION reminds you about a HomeEquity LineofCredit, called our “Prime Equity”line, because we offer a rate PRIME!* 5.98% Fixed Introductory Rate for the first 3 Months i Rates PRIME for the Remaining Term of the Loan* {& No Application Fees** i Interest-Only minimum Payment Option PROSTATE RELIEF cack than vial one 4s fall cealoasent You must read this report: is INT=R-TH=L ‘dealer cent on underwear. Yet we care- Bails le ec > ‘Try bartering. You may be able todrafting negotiate some free haircuts for your hairdresser’s will. 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