Author: 692738 Number: of 20293

Subject: General Analysis Date: 2/13/1999 7:16 AM

In analyzing a company like Coca-Cola it is very important to give its track record over the last half century its due
respect. Also respect must be given to its reputation outside of the USA as one of the symbols of America as well as it's
worlds premier trademark. But the question is should I invest in this company?
I have not come to the Motley Fool boards in order to give advice. My job as I see it is to try and give information. Giving
advice was something that I used to do for a living. Helping Investors is what I hope to do now. I am not in it for the money
for I have served my time in the trenches and now it is time to enjoy life. I am now a free spirit and choose to bring my
expertise which is equity investing to this forum. I have great respect for Tom and Dave and
wish to thank them for this forum. Whether it is used well or not, depends on us.
Now back to KO as an investment. I purposely presented my database in six parts for it is important for the investor to see
small parts at a time and not to rush into making decisions. They must understand that there is plenty of time to make
money. One should not attempt to make it overnight for they may end up losing it overnight. The Internet frenzy which is
upon us should be looked at as a poor investing opportunity for the average investor. What one should look for in an
investment with a long term track record of excellent performance through good times and bad. The reason most money
managers can't beat the Indexes is because they try too hard to win and end up losing.
By this I mean they try to beat each other and thus create a competition in the industry. One should not compete as an
investor for this is not a game, but is serious work. Imagine a Doctor going into surgery without having the know how to
perform the operation. That would be bad news for him and the patient in the end . The same scenario is being played out
on Wall Street. When you see seasoned veterans running like kids after companies that have no profits and no track
record. One should be scared!!!
As I have showed you in the six parts which I hope you will print out for they put together form a record of strength and
performance matched by very few.
Here you have a company which has never lost money in a given year. It is conservatively managed not for next quarter
but for next century.

It's sales have had a 47 year growth rate of 10%

It's earnings have grown at 11% and it's book value by 9%

As it shows also that one would have made money at anytime one purchased KO. Ofcourse one would have made more if
one had purchased it at certain times instead of others, but the same can be said that one could have missed a lot of
opportunities by waiting for the right price. Lets take Warren Buffett for example. He would have made three times more
money in KO if he had invested in it in the early 80's instead of the late 80's when he did make his move. And what about
him not buying Microsoft. I don't get that one. The secret to Warren Buffet's success is very simple. Use “other peoples
money”. The float that he receives from his insurance operations are truly amazing and provide him with enormous sums
of money. I didn't understand why he bought silver and is still holding on to it. But that's for another day. You can look very
foolish trying to explain to people the mistakes of a person with $36 Billion++. Back to KO .
PE as can be seen is all dependant on the Interest Rates at a particular time. When companies have low PE's it is
because there are in high interest rate environments, and are forced to pay out their profits in Dividends. They do this for
they don't want to lose shareholders to High CD Interest rates. This kills a company for it can not reinvest its earnings and
grow but is forced to compete with banks. PE's deserve to be high now for Interest rates are so low. I feel very
comfortable investing in an environment where companies like KO are increasing their Capital Spending in order to
increase their earnings. The money they are not paying out to me, they are building Factories in China, India , Asia and
now thanks to Brazil, In Central and Latin America. This is a great time to really learn of what a great management we
have , by their coolness under pressure. They did not split the stock at 88 last year for they knew that trouble was coming.
Other companies would have split it and you would have had a stock in the 20's today, which would have made most
investors panic. This shows that KO has a very responsible management.
Finally I believe as Benjamin Graham used to, in Diversification. I personally hold a lot of different companies for I believe
that 90% of investors and Money Managers don't know how to invest. Thus I am partners with them and though I may be
perfectly right and sure about an investment, I dare not put more then a percent or two in it for , other investors might
panic on some piece of incorrect news and thus I get hit heavy. 3com is a perfect example of that scenario acted out. My
performance is based on understanding the companies that I own and why I own them. I lean more in the direction of
Peter Lynch, who in my opinion is the greatest investor who has ever lived. His method of buying what you know should
be 50% of ones purchase, the numbers should be the other part. I seem to have gone on too long, I will be on this board
from time to time as well as another 100 ,so remember new investors, “a journey of 1000 miles , begins with the first step”.
Don't try to learn investing in one day, a good investment is like a rare bottled wine. It must be stored away for years for it
to really be something special. Ignore the fly by nighters and invest only in the best companies. I will try and put one new
1950-1998 stock analysis on these boards for a different company every week if I can. Have a pleasant weekend !
Dear rajneesh,

I like to use Value line in getting the numbers for Owners Earnings for they are a hell of a lot better quantitative analysts
then I am. On the 2/26/99 VL
They have the following;

Cash Flow per Share =$2.00

Capital Spending per share = $.80

Owners Earnings = $1.20

Common Shares = 291

1.20 * 291 = $349.2

Value Line has been doing this work since 1937, Why should I question their numbers!!!

MYCROFT

This board is set up for the purpose to study and create a system based on the work and formula of the late great "Money
Master" George Michaelis.
Mr. Michaelis is no longer with us for he was killed in his prime in a tragic accident. What he has left behind is a formula
which is the foundation of the work on this board;
____________________________________________________

YIELD = (Return on Equity * Payout Ratio)/Price to Book Value

GROWTH = Return on Equity * Reinvestment Rate

TOTAL RETURN = YIELD + GROWTH

____________________________________________________

ROE = Earnings Per share/ Shareholders Equity per share

Payout Ratio = Dividend per share/earnings per share

Reinvestment Rate = 100%-Payout Ratio

Price to Book value = Price/book value per share

REAL PE = PE Ratio/ Return on Equity (ROE)

P/MTR = PRICE COMPOUNDED/ Michaelis Total Return Compounded

---------------------------------------------------
So far that is all we have but like The Motley Fool this is a work in Progress. All are welcome to join in and give us a hand.
I will concentrate all my attention to this board and try to answer as many questions as I can. I will try to bring original
research on Companies and bring their Statistics going back as far as 1950 when I can find them. When I first research a
company I will post the 1950-1998 numbers to that company's board, but I will post the Advanced Michaelis Analysis on
this board , not to offend anyone if we have determined a sell or hold signal for their particular holding. We have no
favorite stocks on this board. Our analysis will be unemotional and as Sergant Friday used to say "Just the Facts
Maam!!!!".
We will hopefully over the years, God willing!!! hit as many companies as we can, reducing the tons of information out
there into a Michaelis Total return format. The parameters I have set for a company to be analyzed are as follows (rough
sketch);

1. Growth rates for at least 20 years of 10% +

2. Current Payout Ratio of less than 50%

I hope you will all join us to make this research a success for it is for the average investor that we are doing this. What we
are attempting to do is come up with a way for the average investor to know when is a good time to buy and hold and
eventually sell. Michaelis Total Return Formula is a way to compare the returns of an actual company on Main Street, with
the value which is assigned to it on Wall Street. Since we believe that the Stock Market is an inefficient market, thus there
should come times that MR. Market will give us opportunities to invest. This work will be also devoted to bringing some
sanity to the investment research world as it is today, which has the effect of manipulating the small investors assets for
the benefit of those who are insiders or in the know. We are doing this for the small investor who needs to be at an equal
playing field for the first time and not rely of the research houses for there occasional scraps that they are thrown. It is a
tall task that we have in front of us and we may not succeed in what we are attempting but "Rome was not built in a day"
and "a journey of a 1000 miles starts with the first step". This board will also follow the advice of the great German
Philosopher Arthur Schopenhauer " Life is short, the truth is everlasting, So let us speak the truth"!!!!!!!!!!!
For those who want to read about George Michaelis, you will only find him in "The New Money Masters" by John Train.
The formula you will find on page 248 of that book. One last point!!! We will also concentrate a great deal of attention on
Warren Buffett's past and present purchases in determining the right PR/MTR ratio , for we believe that Mr. Buffett is in
the know on what is a good price to pay for a stock. By analyzing the prices that he paid we will thus be able to see if
there is a pattern which we can determine through Michaelis. Mr. Buffett was best friends with George Michaelis when he
ran the Source Capital Fund (a closed end fund), in fact MR. Buffett owned a majority stake in that fund. Thus that alone
should tell you about who George Michaelis was, for If I recall Warren Buffett does not just invest in just anyone, but is
extremely selective, we will attempt to be the same.

Welcome aboard everyone and thank you again to the Motley Fool Organization!!!

Let us Begin!!!!!!!!!!

Author: 692738 Number: 29 of 2908

Subject: Re: DOW JONES 1920-CURRENT Date: 2/25/1999 5:01 PM

Welcome jaydelvecchio,

What I have done is to try and explain how Main Street performed (MICHAELIS TR) and how the DJIA performed in
relationship to it. Wall Street is in the business of predicting the future thats why its not a very good business for one can
not predict the future with much accuracy, consistently. Take 1930 for example;

You would have noticed if you were an investor at that time that the Michaelis TR dropped 61.34% in that year and should
have told the "Intelligent Investor" to bail out. If he didn't bail out then he would have lost 63.59% of his money in the next
two years. I am a firm believer that if one ignores Main Street then one can never beat the averages. This is just one
example. Look at the last five years. Business on Main Street is booming on Main Street and Wall Street has showed its
approval. When news events are involved it gets a little confusing but it would have told you in 1974 that Main Street was
still healthy and if one had thought without emotion, one would have made a killing. I hope this helps you to understand.

Your friend

MYCROFT

I unfortunately am not a techie, I started way back with punch cards, and my skill level is just a little above that now. I will
post all information that I track down on each particular company's MF board. I will post them in parts 1-7. You can see
them on the MMM, KO ,SGP,GLK as I have already posted them. What I reserve for this board will be the Michaelis
Analysis of those numbers. If you are so inclined you can set up a spreedsheet for yourself and download those numbers
into it. I am very sorry that I can't help you more. Perhaps someday some great techie will come on board and be our
download representative. I am a research analyst and thats what I will be trying to do on this board. There are many hats
to be given out and I will be glad to distribute them all except the research one. That's my baby!!!

Your assumptions are right and nothing in life is perfect. Business was good in 1927 and 1928 on Main Street and there is
no way to predict what would have happened the following years. All this can tell you is to get out and cut your losses for
the conservative investor. Plus as I mentioned before that this is just a very general analysis and does not include news
events, bond yield, etc... All it tells you is how Main Street is doing and allows you to see how the market reacted to it.
It is not a cure all. It allows you to be partial right most of the time and that is a lot better then not having a clue which way
it will go. I believe Warren Buffett has said that he hopes to be partial right when he makes an investment for that gives
him the advantage over the others.
Thank You for your post

Your friend

MYCROFT

Mycroft,
You've said before you are a qualitative analyst. Some of your writings along those lines are very educational. This
Michaelis method is a purely quantitative approach and seems to contradict your assertion that you're a qualitative
analyst. Was I wrong about you being a qualitative analyst? Or are you now a quantitative analyst?

Some thoughts on the Michaelis method:

YIELD = (Return on Equity * Payout Ratio)/Price to Book Value

By my rusty algebra, since book value and shareholders equity are the same, this reduces to Yield=Dividend/Price or
good old fashioned dividend yield.

GROWTH = Return on Equity * Reinvestment Rate

Not so fast. While this is a mathematically correct equation for a firm's sustainable earnings growth, it doesn't tell the
whole story. It doesn't help investors identify whether or not the firm has sufficient reinvestment opportunity for retained
earnings. It doesn't help investors know how retained earnings are being reinvested—for maintenance, for growth, or
piling up as cash.

You're being very helpful asking investors to focus on companies which have generated high returns on equity in the past.
Knowledge of how firms generated those returns and whether or not this is likely to continue in the future is the sort of
education investors need.

They don't need another system.

You appear dedicated to helping investors learn. The qualitative Mycroft can help them learn what they need to know.

Best,
CM

Regarding your question on PR/MTR it is PRICE/MTR.

Forgive me for not clearing that up. I got the numbers from Dow Jones Indexes 1895-1995 and the numbers I calculated
myself using the data from a Value Line Chart that was distributed a few years ago.

We will be trying at first to make certain parameters on what indicates a buy, hold, sell number. We will then analyze a
company which we consider a buy from our Michaelis Analysis. We will then put it through the Qualitative Analysis of
Philip Fisher and his "15 Points". If it thus passes all the tests which there should be many we will then consider it one of
our stocks. We will then track it to see its performance.
I must warn you, that this is just theoretical work and one should do his or her own research and the decision to buy or sell
should be their own to make. This board is here for theoretical research in finance
and is an open board for it has the hope of making all who come here into "Intelligent Investors" . We will be taking
suggestions on stocks to analyze, but remember I am Human and not a computer. I will put them on a list and do which
ones I feel are important.
The basic requirements are that the company has achieved a 20 year growth rate of atleast 10% and that its payout ratio
be less then 50%. That's about it.
I am thinking about making a portfolio of no more then 20 stocks, but trust me it should take a long time to find those
companies for it is my belief that one should be "forced into buying a stock" because the numbers are so favorable. This is
how I think Warren Buffett feels about the process with his Punch card theory.

This is a re-post of post #5766 on the KO board.

Would look forward to any feedback or further thoughts.

Michaelis defines Total Return as follows:

TOTAL RETURN = YIELD + GROWTH

RETURN ON EQUITY * PAYOUT RATIO

YIELD = -------------------------------
PRICE / BOOK RATIO

GROWTH = RETURN ON EQUITY x REINVESTMENT RATE

Dividend
Payout Ratio = ------------------
Earnings per Share

Reinvestment Rate = 100% - Payout Ratio

My initial thinking about the Michaelis Total Return

formula was that it was essentially the same as ROE.
After all, the Yield component of the Michaelis
formula could easily be broken down from its more
complex original form set forth above to the more
basic definition of yield, i.e., dividend/price. This
was ably pointed out by Bob Kirsch in post 5698 in the
KO board. Here's one way to look at it:

Return on Equity x Payout Ratio

Michaelis Yield = -------------------------------
Price to Book Ratio

Dividing by the Price to Book ratio is the same as

multiplying it by its inverse, that is:

Book Value
= ROE x Payout Ratio x ----------
Price

Now if we use the textbook definition of each term we

get the following:

Earnings Dividend Book Value

= -------- x ------------------ x ----------
Equity Earnings per share Price

If we express the first term, ROE, as a per-share

value, that is, earnings per share divided by equity
per share (i.e., Book Value), we get the following:

EPS Dividend Book Value

= -------- x -------- x ----------
Book Value EPS Price

From here, it's easy to see that both EPS and Book
Value cancel each other out, and you're left with the
following definition of Michaelis Yield:

Dividend
= --------
Price

...which is exactly the common definition of yield.

So why didn't Michaelis express it that way? Who knows!
Anyway, I thought that when you computed Total Return
by adding Yield to Growth, you would basically end up
with ROE, much as the Michaelis formula for Yield
ended up as something much simpler after it was broken
down. In fact, the Michaelis formula for Total
Return is the same as ROE when the company does not
pay out a dividend. In all other cases, however, it
resembles ROE but with an interesting twist:

Michaelis Growth = ROE x Reinvestment Rate

= ROE x (100% - Payout Ratio)

100% is the same as the numeric value of 1. Thus,

multiplying ROE by each term in the parentheses,
we get the following:

= ROE - ROE x Payout Ratio

Dividend
= ROE - ROE x --------
EPS

Again, if we use the definition of ROE as EPS / Book

Value, we get the following:

EPS Dividend
= ROE - --------- x --------
Book Value EPS

which breaks down to the following definition of

Michaelis Growth:

Dividend
Growth = ROE - ----------
Book Value

If we then add back our simplified version of

Michaelis Yield to arrive at Total Return, we get the
following:

Dividend Dividend
Total Return = ROE - ---------- + --------
Book Value Price

What does all of this mean? I'm not sure. It's clear
that Michaelis is discounting dividends paid out by a
corporation on the Growth side differently than he's
crediting a shareholder for the dividends received on
the Yield side. In other words, the opportunity cost
to a corporation in paying out the dividend is
different from the financial benefit received by a
shareholder from that dividend. This is consistent
with the commonly held view that corporate growth
suffers in high-interest environments, because the
corporation's need to pay out dividends (in order to
stay competitive with other investments) adversely
affects its ability to profitably reinvest in its own
business.
This may actually be the genius of Michaelis. I don't
quite understand how it works, but intuitively it
seems to make sense. I think what Michaelis may have
done was to create an improved measure of the
effect of corporate earnings on share value. While ROE
treats all corporate earnings equally, Michaelis
assigns a different value based upon whether they are
retained by the corporation or paid out as dividends.

As you can see, in cases where the company does not

pay a dividend, Total Return is exactly equal to ROE.
However, in all other cases, a company that pays out a
dividend is going to have less of a Total Return than
one that does not, assuming (as is true in almost all
cases) that Book Value is less than Share Price.
That's why companies with equal ROEs may have
drastically different Total Returns. It would also
lead one to favor non-dividend paying corporations as
investments, if you buy into the Total Return theory.
I think that Mycroft (I can't remember the numbers, so
that's what I'll call him) pointed out Pfizer vs.
Schering-Plough as an example of this discrepancy -
that is, two companies with roughly equal ROEs but
drastically different Total Returns.

Any further thoughts about why this formula is better

or more accurate than ROE? Any calculation mistakes,
comments or criticisms? I would be interested in
anyone's thoughts on the above.

see excel GLK chart

What follows is the final work on GLK. You can find

parts 1-7 on the GLK board . The current opinion is
that no action should be taken. Remember The system
requires a buy signal from both PR/MTR and Real PE.
and as well a Sell signal from both when selling

A buy signal for PR/MTR = Less than .85

A Buy signal for Real PE = less than 1.00
A Sell Signal for PR/MTR = Greater than 2.0
A Sell signal for Real PE = Greater than 1.0

If one views the MF snapshot page you will find;

Return on Equity (TTM) = 4.02%

PE RATIO (TTM) = 29.52

We know that Berkshire Hathaway has purchased the

shares of this company but Berkshire Hathaway is known
for getting there early. We do not have the
information yet to get behind the wagon on this stock
as of yet. For we are not risk takers but very risk
averse. It is better to wait and see what happens
for it is better to get behind the cart late than it
is to have the cart roll back on us if things don't
turn out well. It is better to be safe then sorry. If
Berkshire is right there will be plenty of money left for all
Dear STomlinson ,

We are on the both on the same side but it seems we can't see each other. I wouldn't have gotten a sell signal at $100 but
let's say that I did, that would only be on the Quantitative side and not the Qualitative Side. In order for us to sell a stock
that we own it must also fail on the Fisher's "15 Points",
From my school days I remember that a score below 60% was a failing grade. Therefore for us to recommend a company
as a sell it must fail on 8 of Fishers "15 Points" . Now KO as you and I know will never be there.
My interest is to make the small investor a long term investor. It would take for a company to be in very bad shape for us
to recommend a sell signal. We will only issue a sell signal in a Final Decision when we feel that it would protect the small
investor from certain doom. Don't Worry my friend my interest is in helping the small investor find the right price to buy and
not in having him or her sell. I hope you can see that if a company failed to pass on 8 of Fishers "15 points" that even
Buffett would consider selling if at the same time the numbers told him to sell. I appreciate your helping us think this
through and I hope I have finally put your mind at ease concerning what I am trying to do. I am working hard looking out
out for the little guys interest, do you honestly think I would do anything to hurt him or her. I know there are people out
there who have held there stocks for 30 years. It would be irresponsible of me to suggest a sell unless I felt that if they
didn't they would be truely hurt. So please don't worry I am not some amatuer playing with numbers. I have been doing
this work for 25 years and I have seen a lot.

welcome Sylvan,

The pr/MTR = Price / Michaelis Total Return

This is our way of tracking the Market prices long term return in comparison to its Total return on Main Street. If a
companys business grows at 100% over 10 years buts stock performance only grows at 75% then there is a bargin there
for 75/100 = .75 We are trying to find companies that are at .85 or lower.

Real Pe = Price to earnings ratio/ Return on Equity

that is an indicator of Management Effectiveness.

By this I mean if you have a company with a strong management , isn't it logical to have a higher PE associated with the
stock price. This one is a little complicated and will be explained in detail throughout the following days, so keep in touch.

Your friend MYCROFT

Of course my friend but I always talk about stocks in a multi-year way. I was talking about Average PE over many years.

Your friend

MYCROFT

Dear Friends,

the following is the second part of this boards analysis process. Fishers "15 Points" which can be found on pages 19-50 of
his masterpiece "Common Stocks and Uncommon Profits" . This the Qualitative Analysis part of our work. Here it is:

Point 1 = Does the company have products or services with sufficient market potential to make a sizeable increase in
sales for at least several years?

This is a definite yes, The company operates in over 200 countries world wide and has about a 40% market share of the
worlds soft drink market. Since Soft Drinks are only about 3-5% of the entire worlds liquid consumption we have
tremendous room to grow.

Point 2 = Does the management have a determination to continue to develop products or processes that will still further
increase total sales potentials when currently attractive product lines have largely been exploited?

Again yes, We are expanding rapidly in Asia , the Middle East, and Africa. We are currently setting up an infrastructure in
the United States to distribute bottled water in 50 States by June. This bottled water should dramatically increase sales. In
Asia we are developing lines of bottled teas and coffees .

Point 3 = How effective are the company's research and development efforts in relation to its size?

Coca-Cola puts a lot of effort in trying to squeeze out every bit of profit, by repackaging product into different forms. They
experiment constantly trying always to improve the products . Last year they brought out a line of Fruit drinks called
Fruitopia for they saw there was a market for it, from their research. It is now the best selling bottled fruit drink sold in
convenience stores around the country, taking over the Number 1 spot from Snapple in just 8 months time. That is a
power move if I ever saw one.

Point 4 = Does the company have an above average sales organization?

They have one of the best if not the best sales organizations in the world. You can find a can of Coca-Cola almost
anywhere in the world . And in the cities you probably can find one within a few blocks from wherever you are. That
requires an elite group of determined salespersons.

Point 5 = Does the company have worthwhile profit margins?

Current profit margin 18.86% Need I say more.

Point 6 = What is the company doing to maintain or improve profit margins?

They are building a global bottling system never seen before and are using the latest technology to produce their products
at a higher rate. Allowing them to flood the Global Markets with products and thus increasing volume. The greater the
volume the great the profit margin.

Part #7 Does the company have outstanding labor and personnel relations?

I have talked to many employees of the Coca-Cola Company and they all seem very happy with their jobs and most are
shareholders. That should tell you something all by itself.

Part #8= Does the company have outstanding executive relations?

Warren Buffett, Sam Nunn, need I continue.

Part #9 = Does the company have depth to its management?

We have some of the best managers in the world. Chestnut is the greatest CFO around. David Taggart, great treasurer ,
Joseph Gladden (LEGAL) and Gary Fayard our comptroller all real pros.
But Ivester our CEO despite his poor showing this year on the Public relations front, is a killer nevertheless.

Part #10 = How good are the company's cost analysis and accounting controls

I have studied the company for more than 15 years and have never found any errors in this department. Our CFO
Chestnut is the best CFO in the world as far as I'm concerned.

Point #11 = Are there aspects of the business , somewhat peculiar to the Industry involved , which will give the investor
important clues as to how outstanding the company may be in relation to its competition?

Leader in global Market Share, Worlds most famous trademark , incredible distribution system and sales force.

Point #12 = does the company have a short range or long range outlook in regards to profits?

The company has an extremely long range outlook. They say they are investing for the next century and not the next
quarter.

Point #13 = In the foreseeable future will the growth of the company require sufficient equity financing so that the larger
number of shares then outstanding will largely cancel the existing shareholders' benefit from this anticipated growth?
All financing is done through little long term debt and short term commercial paper . the company has bought back 35% of
its issued shares and has no existing plans to stop the buyback process

Point # 14 = Does the management talk freely to investors about its affairs when things are going well but “clam up” when
troubles and disappointments occur?

They never ever had this problem but now they do. I don't know why they have become so secretive but they have. It is
my only concern about this company. The chief culprit is our CEO Douglas Ivester. He never goes on any of the talk
shows or gives interviews after the company releases its earnings. I used to have a good relationship with Investors
relations but now they have changed.
Why the secrecy??? Only God and our CEO know.

Point 15 = Does the company have management of unquestionable integrity?

They might be silent but they are all good people and the Director of the Finance Committee is none other that Warren
Buffett himself, need I say more

FINAL SCORE

POINTS 1-13 , 15 PASS

POINT 14 FAILED

14/15 = 93% or A

Dear friends,

Since yesterday was our first day and we have become somewhat acquainted. It is now time to start our portfolio and
track its performance in relation to the major index's. We will start the portfolio with an amount of $100,000 (phony money)
and deposit it in lets say a Waterhouse Account. Since our style of investing makes it rather difficult to find stocks to meet
our needs, we will buy only a maximum of 20 different companies in total. Since having just completed an Advanced
Michaelis Analysis of KO and also a Fisher Qualitative Analysis. We have determined to rank KO a buy. Therefore we will
make our first purchase as of tomorrow morning at the market open buying $5,000 worth of KO. I would appreciate it if
someone would volunteer to track the portfolio in a spreedsheet for us for I am too busy with the analysis end to do any
market watching myself. We will keep the remaining $95,000 in a Waterhouse FDIC insured account which will pay
interest at Money market rates at about 4.5%. This is the only purchase that I will make for the portfolio on my own
initiative. From now on any other purchases will be made on a group level once we all get acquainted with each other. If
someone tommorrow can post the opening price for KO it will be much appreciated for I am on the west coast and I'm
sleeping when the market opens.We will compare our performance with the following indexes. DJIA ,Nasdaq and the S&P
500.

The Indexes closed on the first day of our existence at and these are the numbers to track our performance;

DJIA = 9366.35
Nasdaq = 2326.82
S&P 500 = 1245.02

We will attempt to be buy and hold investors until the Michaelis System tells us to sell. We will sell only with a 2/3 majority
in agreement and we will buy with a 2/3 majority in agreement.

The grand experiment has finished its first day successfully I might say finishing in the TOP 25.

Good Luck to us all !

And thank you for contributing!!

Your friend

MYCROFT