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Conservative Portfolio Strategy
Last update:  January 24, 1999

A stock is purchased if:
     1)  it has a market capitalization of more than $1 billion.
     2)  it has a relatively smooth, upward-sloping 10-month moving average.    
     3)  it has consistent revenue and earnings growth
     4)  its PE ratio is less than three times its three-year EPS growth rate
     5)  its three-year EPS growth rate is greater than 10%
     6)  its three-year annualized return is greater than 30%
A stock is sold if:
     1)  it encounters severe fundamental problems.
     2)  it trades 30% or more above its 10-month moving average.
     3)  another stock looks more compelling.

This portfolio will NOT include short positions.

The goal of this portfolio is to significantly beat the performance of the S&P 500 each year.

By focusing all purchases on non-volatile, blue-chip companies, the portfolio's gains will match those of the S&P 500 in an up market and the portfolio's losses will be less than those of S&P 500 in a down market.

Most purchases will come from the tables shown on the
Stocks To Watch pages.

Borrowed funds (margin) will NOT be used.

� 1998  VTO Capital Management.   All rights reserved.