DWDI vs SPDR - 10/02 Recap

Major Markets, DWDI & SPDRs ended today as follows

Market	% Change	Value
Dow	-0.07%	11,718.45
S&P 500	-0.34%	1,339.15
NASDAQ	-0.92%	2,270.02
-	-	-
DWDI	-0.43%	1,010.76
SPY	-0.37%	1,016.89

Personal Portfolio -0.35%

Daily recap for the 10 Stocks that make up the DWD Index

Stock	% Change	Value
Anheuser-Busch	-0.04	100.72
Biomet	0.19	100.09
Fastenal	-1.61	99.74
Home Depot	0.19	101.06
Johnson&Johnson	0.23	101.77
Medtronic	0.56	100.21
Microsoft	0.04	102.62
Wal-Mart	-1.78	100.31
Washington Post	-0.58	103.10
Wrigley	-1.54	101.14

I'm still looking for a replacement for either Medtronics or Biomet since both of those companies are in the same category ie, Medical Equipment.

I went back to my original screen and changed two of the search parameters, one at a time to look for other stocks to consider which are as close as possible to the original parameters that were investigated.

When I moved the risk levels from low to medium I came up with two additional stocks to consider; Apollo Group A (APOL) and Avon Products (AVP)

APOL is in the Consumer Services sector in the education industry - it's a quite interesting stock but, since we already have Home Depot and Wal-Mart in the Consumer Services sector we won't want another one in the interest of diversity.

Avon is in the Goods sector which pits it against Anheuser-Busch and Wrigley ...again, we would not diversify with the addition of Avon.

I then put the risk level on the screen back to low and removed the Moat criteria. With MorningStar, a Wide Moat is indicitive of a great competetive advantage. Removing that criteria resulted in only one additional stock, this time it was Student Loan rise rose to the top.

Student Loan (STU) is in the Financial Service sector ...a big plus since no other stocks in the portfolio are in that sector. It's industry is finance. It has a

Fair Value Estimate of $235.00
Consider Buy Price of $200.20
Consider Selling Price of $308.50

The nicest part ...it's currently sellingfor $194.25
As of market close on 9/22/06 the price was $186.50

A few things to take into consideration now is which stock to replace - BMET or MDT. In terms of market capitalization MDT is the winner hands down, about 54 billion compared to almost 8 billion for BMET. BMET is projected to have higher returns but since a key component of the index is below average risk (which is still maintained for all stocks w/ the addition of STU) we would tend to favor keeping MDT since it is a more established company.

Some precidences will be established. For one thing we will not be accepting multiple stocks in the same industry. Another thing is the addition of the stock and which stock basis to use. For simplicity I'll probably just use the closing price on Sept 22 to determine how many shares should be bought at that price to equal a value of $100.

Instead of manipulating this index any further I am considering an index of 12 stocks, one from each sector based on the highest rating by morningstar. I'll have to explore the criteria but i'm interested to see which stocks emerge. Also of interest is any overlap which might be seen.