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To: Tony Pache who wrote (1956)	12/30/1998 11:53:00 AM
From: Eric Jacobson	Read Replies (1) \| Respond to of 2346

No offense, Tony, really, but you just gave Rand some pretty bad advice. Imagine if a year ago, Rand had decided to split his $20k into 10 stocks, $2k each. I don't want to do all of the math, so for now, say four of those stocks were MSFT, CSCO, GPS, and PFE. A year ago, these stocks were selling at 65, 37, 23, and 75 respectively. So, for his $8k Rand would have bought 30, 54, 87, and 27 of each of these stocks, respectively. What would he have to show for his odd lot purchases, you ask? Well, today his 30 shares of MSFT at 140 would be worth $4,200, 54 shares of CSCO at $95 would be worth $5,130, 87 shares of GPS at $57 would be worth $4,959, and 27 shares of PFE at $125 would be worth $3,375, for a grand total of $17,664. That's right, his odd lot purchases would have more than doubled. Shoot, just look at PFE for the lesson to be learned - his 27 meager shares would have increased in value by 68%. Odd lot purchases are nothing to be ashamed of. It's a myth of investing. Similarly, don't shy away from "expensive" stocks (i.e., stocks with share prices over $50). The only thing that counts is percentage gain/loss. My advice - pick 10-14 stocks. At a $10 commission for each purchase, your expenses of $100-$140 will be less than 1% of your total invested amount, which is better than most mutual funds. For at least 25% of this amount, stick with big, solid Dow 30 companies. Shoot, try the Beating the Dow approach.

To: Tony Pache who wrote (1956)	12/30/1998 2:13:00 PM
From: Eric Jacobson	Read Replies (2) \| Respond to of 2346

Tony - someone pointed out to me in a private message that the first sentence in my posting was harsher than it needed to be. I agree and wanted to apologize. We all have different investing styles and rules we follow. You are entitled to yours. The "100 share" lot purchase is one I disagree with largely because it leads small investors to select from lower-priced stocks in order to buy a whole lot, when the emphasis of any investor should be selecting the best stock regardless of the current share price. I just wanted to point out that following this rule, Rand would have missed out on the growth of some of the best stocks over the past year. If this is the case, then perhaps the "100-share lot" rule needs to be rethought or discarded. For example, take the present case. Following your advice, Rand would now put $10k into a mutual fund, and the other $10k into 2-4 stocks. This means between $2,500 - $5,000 for each stock. In order to buy a 100-share lot of two stocks, this means the universe of stocks currently priced over $50/share is completely off limits. In order to buy a whole 100-share lot of four stocks, this means the universe of stocks currently priced over $25/share is off limits. So, this rule is telling Rand not to buy some of the best companies in the world - companies like GE, MSFT, INTC, CSCO, GPS, MDT, LU - just based on the current share price. In my opinion, any rule which eliminates these companies or other similar companies from consideration isn't a very good rule to follow. To debunk some of the myth of investing, novice investors would be wise to check out the free investment course at the IBD website at investors.com, including the 18 Common Investor Mistakes, and the Motley Fool website at fool.com Happy New Year to everyone.