Rule Breaker Portfolio

Rule Breaker Portfolio
Opinion Dominion
...and @Home at the FCC

By Barbara Eisner Bayer (TMF Venus)

Hillsboro Beach, FL (Nov. 18, 1999) � Whenever I open a can of Little Friskies Turkey & Giblets, I hear the hastened scurrying of 12 little cat paws crashing into each other as they race towards the finish line of their dinner plates. Two of the cats, whose behavior would indicate they haven't been fed since birth, franticly gulp what masquerades for caviar in their little cat brains. Catman, the eldest, sniffs the banquet, shoots me a dirty look, and begrudgingly walks away. In his opinion, Turkey & Giblets would be more appropriately used as garden fertilizer.

If Catman could type, he would bombard the media with columns enumerating the negatives of Turkey & Giblets. He would investigate the ingredients, analyze research data from the Little Friskies website, and come up with a valid and original theory as to why this cat food entree would be more effectively used as the secret ingredient for the next nuclear bomb.

Being right or wrong is irrelevant to Catman, a long-time practitioner of Socrates' injunction to know thyself. He has confidence in his opinions, and is comfortable when others express dissenting views, even when his siblings think Turkey & Giblets is the next best thing to having bought AOL back in 1994. (My cats, as you can see, are smart.) He doesn't share their opinions, but respects and tolerates their right to cordially disagree. Catman, as if you haven't already guessed, is also a Fool.

This quality of Foolishness dates all the way back to 155 B.C., where Carneades, a Cyrenese philosopher, went to Rome to deliver two public orations. In the first, he argued in favor of justice; in the second he argued against it. Even though each speech enraged one half of himself, he refrained from physically attacking his person, choosing instead the methodology of debate to keep himself from becoming a complete schizophrenic wackadoodle.

The tradition of expressing varying opinions is the foundation on which the Fool -- like America -- was established. Polarity in opinions is what makes us thrive intellectually. We relish debates delineating dissenting opinions, as long as they stay within the guidelines of polite discussion.

By adhering to our Guidelines for Posting, all community members can ensure that opinions can be expressed without igniting intimidating controversy that can unmake a Fool's day. This even applies to our beloved gadflies who take the position, like Groucho Marx, that "Whatever it is, I'm against it."

Our mission at the Motley Fool is not to tell you what you should do, but rather to help you become educated in order to formulate your own ideas. Like Catman, we enjoy a diversity of points of view. We'll offer you opinions based on our own analysis, but this in no means is an endorsement of an individual company. It is only our opinion. Just because WE love a company, doesn't mean YOU have to!

The Rule Breaker portfolio continued its love affair with volatility today as it shot up 2.36%. eBay (Nasdaq: EBAY) led the charge, rocketing $11 1/8 to $152 1/4 on -- ta da -- no news, giving additional credence to the old saying, "No news is good news."

Excite@Home (Nasdaq: ATHM) roared up $4 3/4 to $49 3/16 as the Federal Communications Commission ruled today that the large regional telephone companies must now share their existing phone lines with companies that sell digital subscriber line equipment exclusively. Prior to this ruling, consumers who wanted DSL service from an independent supplier needed a second data line added. They now will be entitled to share the already existing copper lines.

This doesn't directly impact Excite@Home's cable modem technology, as DSL is a competitor and delivers Internet access at much higher speeds. But the move shows how the FCC is aggressively trying to give consumers a choice of high-speed Internet providers.

In addition, Excite@Home is considering using wireless transmission boxes, which will result in decreased installation costs and give the customer high-speed Internet access regardless of where in the home the cable connection is located. Customers would be able to buy the cable boxes in retail stores, eliminating the average 70 minutes of technician time it currently takes to get set up -- assuming, of course, he shows up when he's supposed to.

America Online (NYSE: AOL), got a $3 lift to $158 5/8 today, as Microsoft Corp. (Nasdaq: MSFT) conceded defeat in its battle to squeeze into AOL's AIM instant messaging service. Microsoft hasn't been having a very good November.

I'd be willing to argue that last statement in the style of Carneades; but I'm afraid I might hurt myself. As for now, Catman is staring at the open can of tuna I'm preparing for tonight's casserole. That's one Foolish cat!

One last note: The Motley Fool Radio Show is looking for some thankful Fools in anticipation of next week's Thanksgiving holiday. Do you have a personal financial experience for which you're especially thankful? Perhaps, there's a stock that's treated you nicely, or a piece of advice from a Foolish friend, or a broker that you've thankfully rid yourself of. If you'd like to share your thankfulness on the Fool's Radio Show, e-mail producer Mac Greer (MacG@fool.com) with a short description of what you're thankful for and a daytime phone number where you can be reached on Friday and Monday.

What do you think?
Please post your thoughts about tonight's report on our Rule Breaker Strategy board. Alternatively, if you have ideas, analysis, or questions about a particular Rule Breaker company, pull up a chair at the roundtable discussion on our Rule Breaker Companies board.






Rule Breaker Portfolio

11/18/99 Closing Numbers
Ticker Company Dly Pr Chg Price
AMGNAMGEN INC1/16$91.19
AMZNAMAZON.COM7/16$77.94
AOLAMERICA ONLINE13/16$159.44
ATHMAT HOME CORP CL A3/16$49.19
CATCATERPILLAR INC9/16$55.94
CHVCHEVRON CORP-1 5/16$95.25
DDDU PONT (EI) DE NEMOURS-11/16$61.56
EBAYEBAY INC11 1/8$152.25
GTGOODYEAR TIRE & RUBBER CO-1/2$38.00
IOMIOMEGA CORP1/8$4.44
SBUXSTARBUCKS CORP1/4$30.13
TDFX3DFX INTERACTIVE5/8$10.44

  Day Week Month Year
To Date
Since
8/5/94
Annualized
Rule Breaker 2.59% 5.82% 16.35% 57.97% 1,488.51% 68.68%
S&P 500 1.01% 2.07% 4.55% 15.92% 210.85% 23.91%
S&P 500(DA) 1.01% 2.07% 4.55% 16.50% 225.11% 24.97%
NASDAQ 2.38% 3.91% 12.83% 52.65% 364.76% 33.70%

Trade Date # Shares Ticker Cost/Share Price LT % Val Chg
8/5/942200AOL0.917$159.4417,284.96%
9/9/972640AMZN3.188$77.942,345.09%
5/17/951960IOM1.280$4.44246.57%
12/16/98580AMGN42.889$91.19112.61%
12/4/98900ATHM28.040$49.1975.42%
2/26/99300EBAY100.527$152.2551.45%
2/23/99180CHV79.169$95.2520.31%
2/23/99300CAT46.964$55.9419.11%
7/2/98470SBUX27.955$30.137.76%
2/20/98260DD58.844$61.564.62%
2/23/99290GT48.715$38.00-22.00%
1/8/98425TDFX25.667$10.44-59.34%

Trade Date # Shares Ticker Cost Value LT $ Val Ch
8/5/942200AOL$2,017.62$350,762.50$348,744.90
9/9/972640AMZN$8,415.03$205,755.00$197,340.00
12/16/98580AMGN$24,875.50$52,888.75$28,013.25
12/4/98900ATHM$25,236.13$44,268.75$19,032.63
2/26/99300EBAY$30,158.00$45,675.00$15,517.00
5/17/951960IOM$2,509.63$8,697.50$6,187.87
2/23/99180CHV$14,250.50$17,145.00$2,894.50
2/23/99300CAT$14,089.25$16,781.25$2,692.00
7/2/98470SBUX$13,138.63$14,158.75$1,020.13
2/20/98260DD$15,299.44$16,006.25$706.81
2/23/99290GT$14,127.38$11,020.00($3,107.38)
1/8/98425TDFX$10,908.63$4,435.94($6,472.69)
  Cash: $6,381.51  
  Total: $793,976.20  



Note
The Fool Portfolio was launched on August 5, 1994, with $50,000. It was renamed the Rule Breaker Portfolio in October 1998. The investing strategy began with the first investments of the Fool Port and has evolved with time and experience. In July 2001, the portfolio began adding $12,500 each quarter (We missed Jan. 2002, so we added $25,000 in April 2002). We skip a quarter if we have enough uninvested cash or cash available in stocks we would prefer to sell to make new investments. All transactions are shared and explained publicly before being made, and returns are compared in each week's column to the S&P 500 (including dividends where noted) and the Nasdaq composite. For a history of all transactions, please click here.