Rule Breaker Portfolio
Trades Made as Record Week Ends
Plus, "Retirement" edges closer

By Jeff Fischer (TMF Jeff)

ALEXANDRIA, VA (Dec. 17, 1999) -- The week rolled into the weekend with a giant, bulging mountain of a rise in stock prices. The Nasdaq has gained over 70% this year, a record, and the S&P 500 is no slouch itself, especially because this year's gain follows back-to-back-to-back gains of at least 20% annually the last four years. Here, with dividends added, are the percentage gains since 1995:

                        1998           1997         1996          1995
Rule Breaker           199.08          25.75        42.93         68.17 
S&P 500                 28.33          33.36        23.07         37.43
Nasdaq                  39.63          21.64        22.71         39.92
For the returns so far in 1999, please see the numbers below. You'll see that the race between the BreakerPort and Nasdaq is heated this year.

When you look at the numbers in the table above and realize that they're the annual returns of the largest stock market in the world, it makes you wonder, "Gee, how much longer can stocks continue to rise? Indefinitely?"

Well, good stocks can rise indefinitely, overall, over the long, long term.

"But won't we see a two-, or three-, or five-year respite -- or perhaps a sharp decline -- soon, and now and again?"

Certainly, yes, sometime we will. That's why we're prepared, as always, to stay invested no matter what stocks do in the near term, because the real benefit of stock ownership can only be derived from long-term ownership.

We began today what will hopefully be another long and rewarding relationship with a new company, our new buy, Celera Genomics (NYSE: CRA). At the same time, we ended a few relationships that turned out to be shorter than we'd hoped, selling 3dfx (Nasdaq: TDFX) and our remaining shares of Iomega (NYSE: IOM). (For the sell reports, here's 3dfx and here's Iomega.) We also sold a small portion of our America Online (NYSE: AOL), selling it only to raise funds for the new buy.

These trades were made soon after the market opened (before we even had our morning Starbucks), with the following results.

The Rule Breaker:
   Sold      380     AOL    at    $84 3/4 
   Sold      425     TDFX   at     $9 5/16 
   Sold     1960     IOM    at     $3 13/16 
   Bought    630     CRA    at    $79 1/2 
Celera's stock traded between $79 and $94 today, before ending around $87, a new closing high, up 14% on the day. We scoured the wires for news releases to try to account for the jump, but we couldn't find anything. The stock traded six times its normal volume (well over $100 million worth). Without news, that's strange. We would suggest that Fools were buying the stock on our lead, but that would mean that a lot of Fools did a lot of research all night to come to understand the company so quickly before buying it, and that seems a tall order in 12 hours.

Maybe, though. The Celera message board has been hopping with research and Fools doing their homework. The most recommended post over the past 24 hours was made by a Foolish analyst out there (I think in New York) who covers Celera. He posted his analysis and summary of the company and its prospects on the Fool's Celera board in this post.

We're excited to welcome Celera to the Rule Breaker, and we very much look forward to delving deeper and deeper into this company's fascinating pursuit of the human genome. Soon.

Retire on AOL, Amazon, and eBay?

Can you someday retire on one of these stocks, or all three? Maybe. Maybe not. Whatever happens, we all hope to reach retirement, or at least the type of freedom that a good retirement traditionally entails even if we prefer to continue pursuing, exploring, and learning -- rather than "retiring." To help Fools get to their next destination (which may be financial independence from all things), the Fool has a shiny new Retirement area, linked here and always in the blue bar atop this page.

Of great interest to us here is the Retirement area's three new real-money portfolios. Each of the three new Retiree Ports, run by our own David Braze (TMF Pixy), is geared for a different level of risk. However, each has the same goal of preserving capital and providing a fixed amount of annual income for the retiree. Be certain to bookmark the Fool's Retirement page and new Retiree Portfolios, and begin to learn now how you can get to where you want to be then -- then being, typically, the sooner the better.

Last Minute Holiday Shopping?

Check out the Drip Port column this week suggesting Fool books and products as gifts for family and friends (gifts that keep giving, that is), as well as linking to other Fool-suggested investing and finance books. For yourself, consider the Fool's Industry Focus 2000, which provides analyses and overviews of 16 industries and chooses 16 investments, one from each industry, for your healthy consideration.

"I Need Perspective"

Until next week, have a great weekend, be stress-free, slow down, think it over, don't worry about gifts, remember what it's all about, smile, don't pull your hair, drive calmly, don't push in the holiday crowds, look at the pretty lights along the street, don't spill your coffee while driving, get off the cell phone, keep your eyes forward, think rationally, enjoy, be Foolish, remember that the daily rush is really all a big silly game that we should appreciate and enjoy as much as possible, and if we have good health we have it all.

Fool on!

Foolanthropy '99: Time is running out to donate to some great charities.






Rule Breaker Portfolio

12/17/99 Closing Numbers
Ticker Company Dly Pr Chg Price
AMGNAMGEN INC1/8$45.56
AMZNAMAZON.COM-13/16$94.06
AOLAMERICA ONLINE-1 1/8$85.00
ATHMAT HOME CORP CL A-1 1/8$47.88
CATCATERPILLAR INC-2 3/16$44.94
CHVCHEVRON CORP-1 15/16$87.50
CRAPE CORP - CELERA GENOMICS GRP11 13/16$88.00
DDDU PONT (EI) DE NEMOURS1/4$68.56
EBAYEBAY INC3/8$150.38
GTGOODYEAR TIRE & RUBBER CO-1 1/16$27.06
SBUXSTARBUCKS CORP7/8$26.13

  Day Week Month Year
To Date
Since
8/5/94
Annualized
Rule Breaker -.15% -6.34% 9.98% 69.92% 1,608.73% 69.67%
S&P 500 .16% .28% 2.30% 15.60% 210.00% 23.46%
S&P 500(DA) .16% .28% 2.30% 16.18% 224.26% 24.50%
NASDAQ 1.02% 3.67% 12.50% 71.16% 421.13% 36.00%

Trade Date # Shares Ticker Cost/Share Price LT % Val Chg
8/5/944020AOL0.460$85.0018,393.80%
9/9/972640AMZN3.188$94.062,850.97%
12/16/981160AMGN21.444$45.56112.47%
12/4/98900ATHM28.040$47.8870.74%
2/26/99300EBAY100.527$150.3849.59%
2/20/98260DD58.844$68.5616.52%
12/17/99630CRA79.513$88.0010.67%
2/23/99180CHV79.169$87.5010.52%
2/23/99300CAT46.964$44.94-4.32%
7/2/98470SBUX27.955$26.13-6.54%
2/23/99290GT48.715$27.06-44.45%

Trade Date # Shares Ticker Cost Value LT $ Val Ch
8/5/944020AOL$1,847.65$341,700.00$339,852.30
9/9/972640AMZN$8,415.03$248,325.00$239,910.00
12/16/981160AMGN$24,875.50$52,852.50$27,977.00
12/4/98900ATHM$25,236.13$43,087.50$17,851.38
2/26/99300EBAY$30,158.00$45,112.50$14,954.50
12/17/99630CRA$50,093.00$55,440.00$5,347.00
2/20/98260DD$15,299.44$17,826.25$2,526.81
2/23/99180CHV$14,250.50$15,750.00$1,499.50
2/23/99300CAT$14,089.25$13,481.25($608.00)
7/2/98470SBUX$13,138.63$12,278.75($859.88)
2/23/99290GT$14,127.38$7,848.13($6,279.25)
  Cash: $359.36  
  Total: $854,061.30  



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.