The Dollar Wise Index

Tonight we'll create our own index and pit it against the S&P 500.
The Dollar Wise Index (DWI) vs Spiders
DWI ...what an acronym! ...so be it ...
The DWI is comprised of 10 stocks which have all had terrific 10 year records. These companies have boosted sales every year for 1o years straight. Additionally, we're looking for value so I looked for stocks selling below their fair value (fair value as determined by MorningStar) , we also looked for below average risk and a stark lack of competition (wide moat in morningstar lingo)
To summarize;

1. Revenue increases for 10 years straight
2. Earnings per share increases 10 years straight
3. non-distressed companies
4. current price below Fair Value price
5. Below Average Risk
6. Wide Moat

Company	Symbol	Current Price	Fair Value	% below Fair Value
Anheuser-Busch	BUD	47.15	57.00	17.3 A/19.5
Biomet	BMET	32.22	39.00	17.4 B/19.8
Fastenal	FAST	38.07	53.00	28.2 A/31.2
Home Depot	HD	35.96	44.00	18.3 D/12.3
Johnson&Johnson	JNJ	63.96	76.00	15.8 B/17.2
Medtronic	MDT	46.60	64.00	27.2 A/19.9
Microsoft	MSFT	26.66	34.00	21.6 A/22.2
Wal-Mart	WMT	48.29	58.00	16.7 A/17.6
WashingtonPost	WPO	710.65	1000	28.9 B/20.8
Wrigley	WWY	44.84	59.00	24.0 C/26.4

The last column shows how far below (in terms of percentages) the current price is relative to the Fair Value price. I've also added some additional information. The Letters (A, B, C or D) is the stewardship (how well the company is managed) grade assigned to each company by morningstar and the number after the grade is the companies P/E ratio. Call me old school but I still prefer to see a low P/E ratio.

This is going to be a very easy index to track (at least that's what I tell myself now!) I've entered these stocks into MorningStars portfolio manager and designated enough shares of each to equal a $100 for each company, thereby giving me a total price (or starting index) of 1000. Additionally, I've entered in 7.6063 shares of Spiders (SPY) which, at $131.47/share comes out to a value (or starting index) of 1000 also.