Fool Portfolio Report
Tuesday, September 26, 1995
The Fool fell 1.26% today on $1 1/4 and $1 3/4 losses by America Online and Applied Materials, respectively. AMAT has now disappointed The Fool to the tune of 13.95% in losses, while America Online has earned Fool's 384.68%.
Apparently, technology is temporarily falling out of favor. . . which is fine. Robert Frost spoke of the folly that truths go in and out of favor; we believe the optimistic estimates for extraordinary technological growth over the next decade are a truth of their own. We'll just wait on their coming back into favor.
Applied Materials' drop today, and KLA Instrument's $3/4 decline with a total drop of 3.55% for Fools, aren't shaking us. These two stocks have compounded 73.5% and 62.2% growth annually over the past five years. . . and that's when the industry was cyclical! We're patient. The less than two months we've held these two doesn't register on Foolish scales.
Hey, Sears (NYSE:S) had a good day, if nothing else. (And nothing else did; Sears was our only performed today.) In the wake of positive comments about their 3rd and 4th quarters by CEO Arthur Martinez, Sears was featured this morning in Investor's Business Daily's New America series. Much talk of the restructuring towards their apparel business as well as the focus on launching new in-house brands in the article. Sears has been an unbelievably profitable holding for us since August, 1994. It has outperformed all of the other 29 heavies in the Dow Jones Industrials since we took our ownership position thirteen months ago.
So, hey, permit us this diversion: THANK YOU, ARTHUR MARTINEZ! Sears has been good to us.
General Electric has also been a fine filly, even though it dropped back $1/4 today. GE is up 10.72% for us since August 11. If we compounded 10.72% growth every six weeks on the $5500 we invested in GE, we'd be up 130% in the stock when we ran the Dow numbers again next August, to determine which were the new Foolish Few Dow Heavies.
What are the chances of GE rising another 100% between today and August 11, 1996? Pretty damned slim. But hey, we're just trying to double the S&P 500 annually. Realistic expectations. . . we hope the compounding clown has taught us this! But there is an interesting point above tied to a minor flame we received today in our suggestion box. Minor flames are fine, by the way, just type them into the Send Criticism form and ship 'em out to us!
The criticism went something like this: "Quit bragging about GE already, Merck is up 14% since you sold it." To which we add that American Express is up 11.5% since we cashed it. Guess what, both of these stocks have outperformed GE since we made our Dow switch!
Ahh, but a Fool says, we never aimed to beat every Dow stock over every six- week period from here until eternity. Nor over every annual period. The aim is to outperform the market, to stick to the discipline, to do virtually no research, and to pay out minimal commissions.
So, true, it'd be nice to be holding Merck shares tightly. Likewise, it'd be nice to be holding American Express shares tightly. We love both of 'em, and frankly, we expect them to markedly outperform the broader market going forward as well.
But heck, let's all win! Small minds create win-lose business scenarios, you and we see this every day around us. Let us hope we aren't a part of them. . . no matter how oft traveled is that path aroiund us. So, if we alerted Fools to a bargain in Merck last year, which they've held onto and through which they've outperformed crumpled hat, broken bells, and big-mouthed Fools. . . hallelujah! May everyone who comes into the company of Fools end up more profitable---not merely dollar-wise---for it.
- Tom Gardner, 9/26/95
AMER -1 1/4
AMAT -1 3/4
CHV - 3/4
GE - 1/4
GPS - 3/8
IOMG - 5/8
KLAC - 3/4
RIDE - 1/2
S + 5/8
Day Month Year History FOOL -1.26% 6.06% 53.61% 70.56% S&P 500 -0.07% 3.48% 26.59% 26.83% NASDAQ -0.77% 1.76% 38.05% 44.14% Rec'd # Security In At Now Change 8/5/94 340 AmOnline 14.55 70.50 384.68% 5/23/95 510 Ride Inc. 9.91 19.63 98.10% 5/17/95 335 Iomega Corp 15.11 24.50 62.10% 8/5/94 165 Sears 28.93 36.75 27.05% 8/11/95 95 GenElec 57.91 64.13 10.72% 4/20/95 155 The Gap 32.55 35.25 8.29% 8/11/95 110 Chevron 49.00 48.50 -1.02% 8/24/95 65 KLA Instrm 89.42 86.25 -3.55% 8/24/95 50 AppldMatl 115.05 99.00 -13.95% 12/23/94 340 SonicSol 14.48 10.75 -25.77% Rec'd # Security Cost Value Change 8/5/94 340 AmOnline 4945.56 23970.00 $19024.44 5/23/95 510 Ride Inc. 5052.44 10008.75 $4956.31 5/17/95 335 Iomega Corp 5063.13 8207.50 $3144.37 8/5/94 165 Sears 4772.65 6063.75 $1291.10 8/11/95 95 GenElec 5501.87 6091.88 $590.01 4/20/95 155 The Gap 5045.25 5463.75 $418.50 8/11/95 110 Chevron 5389.99 5335.00 -$54.99 8/24/95 65 KLA Instrm 5812.49 5606.25 -$206.24 8/24/95 50 AppldMatl 5752.49 4950.00 -$802.49 12/23/94 340 SonicSol 4924.18 3655.00 -$1269.18 CASH $5927.47 TOTAL $85279.35