Fool Portfolio Report
Wednesday, September 27, 1995
We nearly got thrown from our mount today. The market seesawed today, with technology issues getting hoof-kicked in the morning, and struggling back in the afternoon. The technology group has now fallen a full 6% in the last two weeks, and the September short-interest numbers recently released show the overall shorting of Nasdaq issues up over 7% for the month.
In dark hours like these, when Fools can't see much past their nose, we like to listen to what the market is telling us, what's the buzz of the nation, and we ask ourselves: Do our portfolio holdings represent the strongest growth industries of the day?
Today, we heard from Chiat/Day and Business Wire, who teamed up on and released a study on adolescent activity in the online world. Surveying 1,500 families with kids between the ages of 6-15 years. Here are some of their findings:
* 65% of the kids spend more time on the home computer than they do watching television;
* 46% of the kids use the home computer 7 days a week;
* 81% of the kids wish they could spend more time online;
* 62% of the kids believe their parents know more about cyberspace than they do;
* 84% of the kids would rather do homework on a computer than with pen and paper;
And so, when technology, as a group, falls 6% in a two-week period, we either think nothing of it, or we start buying for the long haul. America Online's $2 3/4 drop, which hurt us badly today, is literally of no concern to us, particularly in light of the numbers above. There was news for AMER, though.
AOL today announced deals with Packard Bell, Gateway 2000 and Digital Equipment Corporation, which will bring preinstallation on all of their new PCs. More significantly, AOL signed a similar deal with Compaq Computer, which will preinstall and promote the online service on all new Presarios. When the regulatory bodies won't step in to provide equal access for competitors, the goal is to get as many distribution legs under you as quickly as possible. America Online is doing just that.
Elsewhere on our Foolish Technology Island, KLA Instruments fell $5 5/8, Applied Materials dropped $3/4, Iomega gave back $1/4, and Sonic Solutions held even, all sans news. We reiterate that we think the technology moves in recent weeks are nothing more than what we've heard named a "healthy correction." When you look at the compounded returns of these issues over the past few years alongside their present financial status alongside their future growth prospects, these sorts of moves look more like remarkable short-term inefficiencies than anything else.
News in retailer land finds Sears announcing that their board has elected Alan J. Lacy to the position of executive vice president and chief financial officer. Lacy, 41, joined Sears in December 1994 as senior vice president, finance for Sears Merchandise Group. He was formerly at Kraft Foods. Anyone Mr. Martinez wants to promote we'll root for. Sears fell $1/4 today.
And The Gap (NYSE:GPS), which climbed $1/2 today, even as the market tumbled. Lookie there, it's a Foolish value play. At $35 3/4, GPS is up
9.83% for us.
Ride Inc. (NASDAQ:RIDE) fell $3/8 to $19 1/4. Ride has now fallen back two points from its highs, but is still up 94% for us since the middle of May. Fools don't underrate the importance of a strong brand in a strong growth industry. . . we can't wait for the coming quarter's numbers from the shredders.
We close tonight with an introduction of what we consider will be a strong brand in a strong growth industry: Rogue Online. Rogue is The Motley Fool's new American culture forum, which will debut tomorrow afternoon. Keyword: Rogue tomorrow evening will get you into the forum. . . and thankfully, there is very little art to download. The forum will not be accessible until tomorrow.
I don't want to spoil it, but having looked through the content, I honestly believe that Rogue will prove to be the most intelligent forum in all of cyberspace going into 1996. From an art gallery to our own Foolish bands across America to coverage of 1996 presidential election, and well beyond these, Rogue is our most ambitious non-financial project yet. I hope you'll enjoy it, and feel free to flame us if you don't!
"And every inch that is not fool is rogue." - Dryden
- Tom Gardner, 9/27/95
AMER -2 3/4
AMAT - 3/4
CHV + 1/8
GE - 5/8
GPS + 1/2
IOMG - 1/4
KLAC -5 5/8
RIDE - 3/8
S - 1/4
Day Month Year History FOOL -1.90% 4.04% 50.69% 67.31% S&P 500 -0.06% 3.41% 26.51% 26.75% NASDAQ -1.13% 0.60% 36.48% 42.50% Rec'd # Security In At Now Change 8/5/94 340 AmOnline 14.55 67.75 365.77% 5/23/95 510 Ride Inc. 9.91 19.25 94.31% 5/17/95 335 Iomega Corp 15.11 24.25 60.45% 8/5/94 165 Sears 28.93 36.50 26.19% 4/20/95 155 The Gap 32.55 35.75 9.83% 8/11/95 95 GenElec 57.91 63.50 9.64% 8/11/95 110 Chevron 49.00 48.63 -0.77% 8/24/95 65 KLA Instrm 89.42 80.63 -9.84% 8/24/95 50 AppldMatl 115.05 98.25 -14.60% 12/23/94 340 SonicSol 14.48 10.75 -25.77% Rec'd # Security Cost Value Change 8/5/94 340 AmOnline 4945.56 23035.00 $18089.44 5/23/95 510 Ride Inc. 5052.44 9817.50 $4765.06 5/17/95 335 Iomega Corp 5063.13 8123.75 $3060.62 8/5/94 165 Sears 4772.65 6022.50 $1249.85 8/11/95 95 GenElec 5501.87 6032.50 $530.63 4/20/95 155 The Gap 5045.25 5541.25 $496.00 8/11/95 110 Chevron 5389.99 5348.75 -$41.24 8/24/95 65 KLA Instrm 5812.49 5240.63 -$571.87 8/24/95 50 AppldMatl 5752.49 4912.50 -$839.99 12/23/94 340 SonicSol 4924.18 3655.00 -$1269.18 CASH $5927.47 TOTAL $83656.85 Transmitted: 95-09-27 18:51:38