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Show The Salt LakeTribune BUSINESS Sunday, March 11, 2001 The Motley Fool - The Right Number people who could get away with telling (or more) less-auspicious firms? Another problem with spreading yourself too thin is that it becomes impossible to keep up with all your stocks. You should try to review your holdings at least every quarter. (Less often can be OK with some established, stable blue chips.) If you've got 25 companies in your portfolio, that means 100 quarterly reports. Yikes. Focusing your money on too few stocks makes your situation extra Tisky, though. You stand to gain a lot or lose lot. In a sense,it becomes less risky the more deeply you understand each company and its workings. Overall, for most people, eight to 15 companies is a good total to shoot for. irorannnn ps Whydo I keep seeing mention of tulips in financial reading? — TF, New Orleans They’re references to the great “tulipmania” episode that took Holland by storm in the mid-1600s. It’s one ofthe first documented cases of a speculative investing frenzy. Incredibly, people were taking out loans ontheir homes in order to buy tulip bulbs. Prices soared to the modernday equivalent of tens of thousands of dollars per bulb. Eventually, the » proverbial bubble burst, wiping out manyinvestors. The easiest way to , avoid “tulipmania”is to avoid , borrowing moneyto invest.It’s also smart to look out for stocks that seem to have beenbid up payor Teason. ¥ : Small Dairies the milk by shooting it through tubes or warmingit in vats before it is packaged. The Milk-Pro system,whichcosts between $10,000 to $12,500, first collects milk in litersized,thick plastic bags,or sachets. Then the milk is heated, bag and all, to pasteurization temperatures += 150 degrees for close to 45 minutes. » Pasteurization after packaging @liminates the possibility of confamination from bottling and capping machines, said Womack. And thoughplastic bags may seem odd {6 Utahns whousually get their {ilk in plastic cartons, Womack id bags are common packaging in Africa and parts of Europe. = The last stage of processing is oling the milk rapidly. Again, water is used as a medium. The bags of milk are placed ina chilling tank of near-freezing water that ools the milk to less than 35 de trees in about 30 to 40 minutes. The more quickly milk is cooled after pent the longerits shelf * short-term debt = debt payable within one year = currentportion of long-term debt = notes payable If you’ ve nevertried to learn to read financial statements (balance sheets, incomestatements, statements Greenwood Marketing, in South Africa, has manufactured anddis- Daewoo Tells GM: Managing Director Greg HaylleDick corresponded with Womack B On Merger Plans Dick, because the money and means required for large pasteurization systems are often inaccessible for dairies in poor countries. More than 100 dairies and agricul- tural colleges are using Milk-Pro to pasteurize milk in South Africa, Uzbekistan, Kenya, Bangladesh, Botswana, Romania and Pakistan. But the technology easily lendsitself to small dairy farms everywhere and Haylle-Dick hopes to add Utah to thelist. “I am elated it has potential for new markets.” Another market might be or. ganic and natural-foods producers. A small, but growing niche has emerged for “dairy-down-thestreet” milk, sold in natural foods stores like Wild Oats or delivered to homes. These niche markets could be the: answer for’ some struggling dairy farms. Greg Radmall of the Utah Dairymen's Association said while the “In the last 25 years, there have been about 1,000 dairies go out of business,” said Radmall. “Utah hadabout 1,500 dairies in the late 1970s. There are less than 500 now.” dls & GARDE NI LAST WEEK’S TRIVIA ANSWER For most of the 1800s, aluminum was a semiprecious metal and scarcer than silver. In the late 1880s, though, my young founder discovered an economical way to make aluminum, and hehel drive downthe price of aluminum.I've always been the world’s premiere aluminum company.| also rere packa,ging machinery,vinyl siding, plastic bottles and closures,fiber ics, and electrical distribution systemsfor cars andtrucks.| employ 140,000 people in some 36 nations. Who am I? (Answer: Alcoa) Write to Us! Send questions for Ask the Fool, Dumbest (or Smartest) Investments (up to 100 words), and your Trivia entries to Fool @fool.com or via regular mail c/o this newspaper, attn: The Motley Fool. Sorry, we can’t provide individualfinancial advice. opti S$ WANTS MARKET DRIVEN GROWTH ate) Ml aati eS Motors Corp. to decide quickly whether to take over Daewoo Motor Co. oncethe ailing car firm resumes normal opera- tions,officials said this week. “We can’t wait and wait for an extended period of time,” said Lee Eun-hyong, a spokes- WANTSA BIG ENOUGH RETURN FROM HIS RETIREMENT FUNDS TO BUY A RANCH IN MONTANA woman for the ‘Ministry of Commerce, Industry and restructuring was Energy. She was commentingFriday on what she called the improved condition of Daewoo Motor, which reopened its main plant Wednesday, about three weeksafterit laid off 1,751 workers. in a restructuring program. The aimed at making the car firm more attractive to GM, which entered negotiations to buy Daewoo last September. FIXED RATE IRAs 18-month CD 2 1/2 year CD 3 1/2 year CD On Thursday, Commerce, April. than producing milk. As with many technology transitions, the reported death of the PC industry is probably premature. Today, Apple has around $11 per share in cash, which meanstherest of the business is valued at about $9 per share (a total of about $3 billion). That’s not much for a companythat hascreated a distinct franchise. Rememberthatrisks with a company such as Apple are high. Much of Apple’s renaissance is based on Jobs’ vision. The companywill have to innovate routinely to stay ahead ofthe curve. Although the PC industry remains a growth business, investors can expectit to slow as the market gets saturated. Still, for opportunistic investors, Apple may be worth a look. South Korea is urging General for cheesemilk last month as they selling their land for development ate. ing lesson learned the hard way? Boil it down to 100 words (or less) and send it to The Motley Fool c/o My Dumbest Investment. Got one that worked? Submit to My Smartest Investment. Ifwe print yours, you’ll win a Fool's cap! CoCr eseesersccrccceseccoosesesseseeseseececeseseseseccs South Korea — 5 year CD VARIABLE RATE IRAs AVAILABLE “If Daewoois left like this, Let us help you decide which IRA is right for you. its value will continueto drop. So we hope that the problem would be resolved by around the end of April,” the spokeswoman quoted her minister as telling local reporters, She said the minister's remarks did not mean that a deadline has been set for GM's takeoverdecision, SPRING SAVE $1.00 HH thoughtit had goneas far as it was going to go. You guessed it — it went to $130 orso andsplit. My lesson learned: Like Warren Buffett, don’t sell anything that is doing OK. — Russell T. Butler, Lakeland, Fla. The Fool Responds: That’s a pretty smart dumb investment! You're right, though. Oneof the toughest things for successful long-term investors to learn is patience. THE ASSOCIATED PRESS SEOUL, Industry and Energy Minister Shin Kuk-hwanexpressed hope that GM would makea decision onits takeover bid by the end of tions, often can make more money Shiny Apple? Investors with a taste for technology and a knack for swimming against the tide might consider Apple Conugen the companythat pioneered the PC revolution. Disappointing earnings, inventory buildup and a slowing economyled the shares into a free fall last year. At about $20 per Sone Apple’s a bag wa’ its high of almost Wei early 2000. Yet companychief executive Steve Jobs, who has made the company an innovator and givenits products the brandidentity its competitors lack, believes the PC will continueto lie at the center of the computing universe, even as cell phones,personal digital assistants, and other simple Internet devicesprolifer- Make Up Your Mind costs of processing and retailing milk are ever increasing, dairies were paid about the same amount were 25 years ago. Utah dairies, particularly small family opera- If It Ain’t Broke... Do you have an embarrass- Know the answer? Send it to us with Foolish Trivia on the top and you'll be entered into a drawingfora nifty prize! P occccccccccccesccercesscsesoose the way to the bank. eo A few years ago I began investing in CitiBank (now Citigroup). My average price was roughly $27 per share. Hard times set in and it went to about $12. I doubled up and brought my average ~ price to $19. When the stock hit about $60, I believe, the savvy Saudi prince who was a majorinvestor in the companysold millions of shares. I figured he knew something I didn’t, so I sold half of my shares. Whata capital gain I hadto pay taxes on! Meanwhile, the stock rose to about $90 andI bailed out. Nice profit and capital gain taxes again.I didn’t need the money, but ofcash flow), giveit a shot. It takes | trace my roots to 1860, to a gentleman whobegan supplying Europe with information onits holdingsin the emerging market of America. | began rating corporate bonds in 1916 and was amongthefirst to rate short-term corporate debt andletters of credit. | pioneered index tracking systems and exchange-traded funds. TodayI’m the world’s leading credit rater, ratingtrillions of dollars’ worth annually. Investors have plunked trillion dollars into investments based on myflagship index of America’s biggest companies.I’m also a top global providerof stock quotes to Internet sites. McGraw-Hill bought me in 1966. Who am I? developing world,” said Haylle- yat pasteurization — which heat equity NameThat Company “Milk-Pro wastargeted for the “= Division Director Kyle R. Stephens said the department hopes to approve the system this week. * Milk-Pro differs from the two most common pasteurization methods used in the United States —heattransfer pasteurization and investing, and hopes you'll laugh all My Dumbest Investment a little perseverance, but the payoff is worth it. As you glance through a company’s annual report, important insights will pop out at you. Merrill Lynchoffers a good guide to learning your wayaroundfinancial statementsat www.natpress.org/html/programs/ financestatement.htm. ee ceseccecccsccecccescecss for several months before bringing Milk-Pro to the United States. : @ Continued from E-1 veneers By Any Other Name tributed Milk-Pro for 8 years. Machine Helps ak tion * earnings = net income= net profit * incomestatement = earnii statement = statementof operations = profit and loss statement = consolidated statement of income * inventories = merchandise inventories * earningsper share = net income per share = net income per common share * net income= netprofit = net earnings * revenues = sales = netsales ° shareholder equity = shareholders’ investment = stockholders’ Whenyou're learning howto read and understand financial statements, a major annoyance will be the fact that manyitems go bydifferent names. For example, you mighthave learned to look for “revenues” on an income statement, but the income statement you're lookingatcalls revenues“sales.” Even incomestatements go by different names. Argh! Fret not, though. The handyreference list below can make your life easier.It’s by no means comprehensive, but it covers many of the variations you'll likely run across. * accounts payable = payables * accounts receivable = trade receivables = receivables * additional paid-in capital = capital in excess of stated value = capital surplus = paid-in capital * balance sheet = statementof financial condition = consolidated balance sheets * cost of goods sold = costs ofsales = cost.of revenue = cost of products sold = costs, materials and produc- Got a question for the Fool? Send it in — see Write to Us Pasteurization > the truth to the King or Queen. The MotleyFool tells the truth about Our Mission: To Inform, to Amuse, and to Help You Make Money ‘heleblope ct ds AP $108. Aperyb og ery thre ID2 agape (dred S148 008 Cad ote hafh (alrededor er When it comes to retirement, wants at least o few choices. That's why First Security offers many IRA options. Like our Valid on one adult tdiiasion ony. Lk one couponper ad $6 admission. Not valid with any other 7 Thursday Friday sl pm I ae Noon 1pm ADMISSION sone as $5.00 mA ale oe jonbypolsteserpaterkpachysunpsowepe pire lL you reach it. Goferses) Drop by the First Security branch nearest you or contact your First lola a Security CPT ata CENTER ] ROR how & semina ar info: Ceccoscccececcccseccocs There’s no one-size-fits-all answer. You ideally want your money concentrated on your best ideas — the companies you think hold the most promise. If you think a certain 10 companies are most Poised for success, why spread your funds over an additional 10 or 20 temember Shakespeare. oe “As You Like 1? In Elizabethan days, Fools were the only What's the best number of stocks to own? — R_E., Jackson, Miss. www.s altlaketribunehomeandgardenfestival.com ed Teed |
