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To: craig crawford who wrote (136772)	1/9/2002 10:53:25 AM
From: H James Morris	Read Replies (2) \| Respond to of 164685

High-fat food stocks beat market in 2001 January 9, 2002 There's no question that when the economy drops, beer consumption hops. But is it also true that when the stock market goes to the dogs, investors pig out on high-fat food stocks? Dave Betts of Fallbrook wondered about that after his sister, Victoria, made a bundle on Krispy Kreme stock. "Dave ventured the opinion that investors might talk about doing some belt-tightening but would actually react exactly the opposite -- by seeking escape in over-indulgence of comfort foods," says La Jolla's James E. Bie, Victoria's husband and Betts' brother-in-law. So Betts constructed a hypothetical portfolio of 30 pig-out, high-fat food companies and tracked their stocks through 2001. He put a theoretical $1,000 in each stock. Name: the Pudgy Fund. Too bad he didn't put real money down. The split-adjusted portfolio was up 45.8 percent on the year. The big winner was Rocky Mountain Chocolate Factory, up 321.6 percent. "It's up 25 percent already this year," says Betts. The second biggest winner was CKE Restaurants, up 244.1 percent to $9.05, although that stock was above $40 in 1998, before it ran into problems. The company is the parent of the Carl's Jr. fast-food outlets. Other winners: Schlotzky's, up 159.4 percent; Jerry's Famous, up 146.5 percent; and Krispy Kreme, up 121 percent. There were losers, of course: Wall Street Deli plunged 97.7 percent, McDonald's was down 21 percent, and Tootsie Roll was down 12.6 percent. All told, 23 of the stocks went up, and only seven went down. "Maybe in hard times people look for an outlet -- like owning a bar in hard times," says Betts. He thinks food stocks will be good in the current market environment, particularly smaller-capitalization ones. "Everything seems to be swinging to small-caps." Will he put in real money this year? "My money is all tied up; I don't trade. Not unless I go to Pala and hit it rich," says Betts.