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To: sea_biscuit who wrote (3663)	2/26/1998 9:59:00 PM
From: Rock Fish	Read Replies (1) \| Respond to of 42834

>The 4% rule, as far as I know, is based on cost, not on >market value. So, if one of your investments does so well >in comparison to the rest of the portfolio that it becomes, >for instance, 15% of your portfolio, then it is OK. That is not my understanding. The underlying point behind the 4% rule is that if, at any given time, your 4% net-worth invested in company X decreases by 50%, then, at most, your net worth decreases by 2%. The whole point is exposure to your net worth. Cost basis has nothing to do with it. -- Rock Fish