Rule Breaker Portfolio

<THE RULE BREAKER PORTFOLIO>

No Fireworks
Teaching Financial Independence

By Paul Larson (TMF Parlay)

CHICAGO, IL (July 2, 1999) -- Ahead of the long holiday weekend (no trading Monday), there weren't too many fireworks in the Rule Breaker portfolio today. Some of the stocks in the portfolio inched skyward while others fell towards the ground, but there was nothing terribly exciting worth capturing on the Foolish virtual camcorder.

Since this is a Friday, let's see where exactly this Rule Breaking conglomerate of stocks ended the day and the week:

                     Today       Week
Rule Breaker        +1.18%     +8.97%  
S&P                 +0.74%     +5.77% 
Nasdaq              +1.29%     +7.38%
I'll say it today, and I'll say it a thousand times in the future: We report the short-term movements on a daily basis in this space, but it is the long-term performance that we really care about. Individual balls and strikes as well as homeruns and strikeouts may change the outcome of a game or two. However, we're aiming to invest over numerous seasons.

While today was a fairly forgettable day with minimal news coming from the Rule Breaker stocks, yesterday we did have an explosion (or is that implosion?) in the portfolio. For those who didn't see the show Thursday, Starbucks opened trading yesterday a whopping 35% below where it closed on Wednesday. The stock has recovered from its lows yesterday, yet Starbucks is still far below where it started the week.

What's the Foolish view on the implosion and the profit warning that ignited the trading action? Being long-term investors not prone to knee-jerk reactions, we will take our time digesting the news and surely won't be rushing for the exits anytime soon. For more immediate thoughts on the situation check out Dale Wettlaufer's Fool on the Hill from yesterday for one take or the Starbucks Message Board for literally hundreds of other opinions.

For something completely different, make sure to celebrate this weekend, dear Fool, since Independence Day can be considered another of our very Foolish holidays. (April Fool's is, of course, our "official" holiday.) Teaching about How to Read a Balance Sheet, Choosing a Discount Broker, and selecting Rule Breakers are all part of what we do, but one of the overall goals of The Motley Fool is to teach financial independence.

Just like the original American colonies telling England that they didn't need Britain's "help" or high taxes, being a Fool is all about freely choosing one's own financial destiny without the often flawed and expensive advice of The Wise. Being a Fool means you have the freedom to learn from your own mistakes as well as to revel in your own successes, gaining experience and improving your thought process along the way.

Our company's official motto posted proudly on top of all of our Web pages is that we "Educate, Amuse, Enrich." The motto could just as easily be "Teaching Financial Freedom." Yes, we will certainly be celebrating this holiday weekend in grand style.

If you're rained in and find reading the Fool an excellent alternative to eating soggy hot-dogs, check out our holiday special. Otherwise, go have some fun with your friends and family. Your stocks aren't going to go anywhere over the next few days, and there is much more to life than researching companies and trading stocks. Forget worrying about Amazon, Open Access, or Interest Rates this weekend, and be more concerned about getting the best seats for your local parade and fireworks show!

Think independently and have a wonderful holiday, Fool.

- Paul Larson

07/02/99 Close
Stock  Change    Bid 
------------------ 
AMGN  +  1/16    60.94
AMZN  +1 11/16  124.06
AOL   +3 1/4    115.25
ATHM    ---      54.94
CAT   +  3/4     61.94
CHV   -  1/16    96.25
DD    +1 1/8     70.88
DJT   +  7/16     4.94
EBAY  -6 1/32   143.63
GT    -  3/16    58.00
IOM   -  1/8      4.69
SBUX  +  5/8     27.56
TDFX  -  1/8     15.38


             Day     Month  Year   History   Annualized 
      R-BREAKER  +1.18%   0.55%  29.35% 1198.33%   68.63%
        S&P:     +0.74%   1.34%  13.76%  217.75%   26.57%
        NASDAQ:  +1.29%   2.04%  25.01%  280.60%   31.31%


    Rec'd    #  Security     In At       Now      Change
   8/5/94  2200 AmOnline       0.91    115.25   12580.86%
   9/9/97  1320 Amazon.com     6.58    124.06    1785.67%
  5/17/95  1960 Iomega Cor     1.28      4.69     266.09%
  12/4/98   900 Excite@Hom    28.04     54.94      95.92%
  2/26/99   300 eBay         100.53    143.63      42.87%
 12/16/98   580 Amgen         42.88     60.94      42.13%
  4/30/97 -1170*Trump*         8.47      4.94      41.70%
  2/23/99   300 Caterpilla    46.96     61.94      31.88%
  2/23/99   180 Chevron       79.17     96.25      21.57%
  2/20/98   260 DuPont        58.84     70.88      20.45%
  2/23/99   290 Goodyear T    48.72     58.00      19.06%
   7/2/98   470 Starbucks     27.95     27.56      -1.40%
   1/8/98   425 3Dfx          25.67     15.38     -40.10%

    Rec'd    #  Security     In At     Value      Change
   8/5/94  2200 AmOnline    1999.47 253550.00  $251550.53
   9/9/97  1320 Amazon.com  8684.60 163762.50  $155077.90
  12/4/98   900 Excite@Hom 25236.13  49443.75   $24207.62
  2/26/99   300 eBay       30158.00  43087.50   $12929.50
 12/16/98   580 Amgen      24867.50  35343.75   $10476.25
  5/17/95  1960 Iomega Cor  2509.60   9187.50    $6677.90
  2/23/99   300 Caterpilla 14089.25  18581.25    $4492.00
  4/30/97 -1170*Trump*     -9908.50  -5776.88    $4131.63
  2/20/98   260 DuPont     15299.43  18427.50    $3128.07
  2/23/99   180 Chevron    14250.50  17325.00    $3074.50
  2/23/99   290 Goodyear T 14127.38  16820.00    $2692.63
   7/2/98   470 Starbucks  13138.63  12954.38    -$184.25
   1/8/98   425 3Dfx       10908.63   6534.38   -$4374.25

                              CASH   $9924.87
                             TOTAL $649165.50
 
Note: The Rule Breaker Portfolio was launched on August 5, 1994, with $50,000. Additional cash is never added, all transactions are shared and explained publicly before being made, and returns are compared daily to the S&P 500 (including dividends in the yearly, historic and annualized returns). For a history of all transactions, please click here.

</THE RULE BREAKER PORTFOLIO>

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