Fool Portfolio Report
Friday, September 29, 1995
Fools fell flat Friday for forty-two frowners. NASDAQ not nice neither, losing less. S&P 500 AWOL 1/4.
KLA kludged cluelessly, now nine ninnies poorer per purchase. Blech KLAC. No news. Hardware hounded homestead horrendously, from Friday's first to last.
AMAT amo amas amat? NO NYET NADA! Toasted two tamales, preventing praise. . . prescribing prayer?
Zip-drive-maker zooming-down-Main Street? NO NYET NADA! Troubled troubadour trashed, down dollar, darn it.
Ride raucously rambles and roars, forwarding Fool flag. And. . .
OK, OK. . . I give up! Just trying to add a speck of spice to an otherwise downer of a day. It's not that the day was THAT bad, which it wasn't. It's not like the week was that GOOD, though, either. The Fool Portfolio lost 2.85%. For the week, the S&P 500 rose about a percent, while the NASDAQ lost about a percent. So the Fool took the white ribbon on this one. Or is that the white hanky?
The only other Fool stock that rose Friday was General Electric, up $1/2 to $63 5/8. GE remains our best Beating the Dow stock of the new crew. Investors who look over their shoulders WILL notice, however, that our sale of Merck in August to switch into GE so far doesn't look like such a great move: Merck is up some 12%.
There was an interesting article in The Wall Street Journal today that some investors may find interesting. The Journal reported on a study done at MIT suggesting that high short interest is NOT a contrarian positive indicator for stocks (indicating those that are likely to RISE due to short covering). Rather, the study reports that when looked at as a group, heavily shorted stocks (defined as those with 2.5% or more of their shares outstanding shorted) do tend to underperform the market both in the short and intermediate (1-2 years) time frame.
Of course, one debunking example given is that of America Online stock (unchanged Friday, though down four points for the week). Since January 31st, the heavily-shorted stock is up 152% vs. a Dow Jones average gain of 25%. I personally believe that heavy short interest has clearly contributed to AMER's run-up. Until we see the details of this study published more fully, the jury shall remain out.
We'll close this week by putting in minor kudos for The Gap. The sleepy, dull investment is now up a sleepy, dull 10.22% since our purchase. Granted, that's behind the market over that period, but the NASDAQ has had a blowout year. We believe that should the NASDAQ continue to pull back, The Gap will begin to look a LOT better. And meantime, we'll work toward a sleepy, dull 20%+ return. Going into the Christmas retail season, this stock is starting to look more and more Foolish.
---David Gardner, September 29, 1995
AMER ---
AMAT -2 1/4
CHV - 1/4
GE + 1/2
GPS - 1/8
IOMG -1 1/8
KLAC -3 1/4
RIDE + 3/4
S - 1/4
SNIC ---
Day Month Year History FOOL -0.42% 5.05% 52.15% 68.93% S&P 500 -0.25% 4.01% 27.25% 27.49% NASDAQ -0.34% 2.30% 38.78% 44.90% Rec'd # Security In At Now Change 8/5/94 340 AmOnline 14.55 68.75 372.65% 5/23/95 510 Ride Inc. 9.91 20.75 109.45% 5/17/95 335 Iomega Corp 15.11 22.63 49.70% 8/5/94 165 Sears 28.93 36.75 27.05% 4/20/95 155 The Gap 32.55 35.88 10.22% 8/11/95 95 GenElec 57.91 63.63 9.86% 8/11/95 110 Chevron 49.00 48.63 -0.77% 8/24/95 65 KLA Instrm 89.42 80.25 -10.26% 8/24/95 50 AppldMatl 115.05 102.25 -11.13% 12/23/94 340 SonicSol 14.48 10.75 -25.77% Rec'd # Security Cost Value Change 8/5/94 340 AmOnline 4945.56 23375.00 $18429.44 5/23/95 510 Ride Inc. 5052.44 10582.50 $5530.06 5/17/95 335 Iomega Corp 5063.13 7579.38 $2516.25 8/5/94 165 Sears 4772.65 6063.75 $1291.10 8/11/95 95 GenElec 5501.87 6044.38 $542.51 4/20/95 155 The Gap 5045.25 5560.63 $515.38 8/11/95 110 Chevron 5389.99 5348.75 -$41.24 8/24/95 65 KLA Instrm 5812.49 5216.25 -$596.24 8/24/95 50 AppldMatl 5752.49 5112.50 -$639.99 12/23/94 340 SonicSol 4924.18 3655.00 -$1269.18 CASH $5927.47 TOTAL $84465.60 Transmitted: 95-09-29
