Fool Portfolio Report
Friday, October 6, 1995

On a wicked Columbus Day semi-holiday, the NASDAQ suffered one of its greatest defeats of the year, down 27.30 points to close below the 1000 mark (at 984.74). This came to a percentage loss of 2.70%. . . in a word, brutal. And it's for that reason that we Fools are sitting around somewhat smugly after remaining, in relative terms, unscathed by the Monday's tech bashing.

Indeed, Iomega rose $1 1/4 today, closing at a bid of $21. Our third-best current holding is now up 38.95% since its May purchase. The company will be reporting earnings before market opening Tuesday, and one expects that investors bid the stock up today in advance of those. If you read our portfolio recap on Friday, you already know that the company tipped off everyone ahead of time by announcing it would have a "small profit" on record quarterly revenues exceeding $80 million. Today's share-price move suggests speculation on the part of some investors who are hoping IOMG will show numbers a teensy bit stronger than implied.

Either way, we remain staunch believers in the company, its management, and its stock. We're holding for the long term, of course, a long term which we expect will have Iomega winning out as the premier---or near premier---storage technology company. Its ability to keep introducing revolutionary products that carve their own markets and destroy those of others is exactly what we like in this fine Foolish filly.

Ride Inc.---speaking of fillies---also swiftly bypassed the hobbled NASDAQ horse today. RIDE rose $7/8 to $19 3/4, a fraction of a point below our 100% return mark.

These two stocks kept the FOOL from dropping that much today, and our portfolio closed off .79%, very similar to the S&P 500 drop of .71%. A few other heavyweights, like Chevron and Gap, also rose, enabling us to more than lap the NASDAQ.

Then there were our own stable mates that came up lame. America Online, for instance. AMER dropped $3 1/2, closing below $60 for the first time since early August. The press announced last week that AOL was in talks with Yahoo, the publisher of the popular Internet table of contents. Perhaps Yahoo will be incorporated into the new Internet-only product that AOL will publish under the GNN title. Perhaps this stock will rebound, now off 20% from its high.

Applied Materials dropped another $3 1/2---yep, this one's dropped like a rock since we bought it. This outstanding company's stock is now off 22% for The Fool Portfolio. As we look over that number, we can't help noticing that it's off about the same amount as Dan Running's online portfolio, Running with the Market. That's not surprising. These are the very same sorts of stocks that Dan rode to 80%+ gains in half a year. Now that the market has turned against them, Dan's portfolio and our semiconductor picks (Applied Materials and KLA Instruments) are all off around 20%. It comes with the territory. Unfortunately for Dan, he's taken criticism from a lot of fickle types, who may not be aware of the outstanding numbers he put up in our Port Folly game. Fortunately for us, we got started a year earlier with our online portfolio, so we haven't taken any flak from the fickle types.

Anyone who's reacting negatively to our stocks, Dan's stocks, or stocks in general over the past month is of course exhibiting natural emotion. We're all bummed out when the market turns against us. Standard stuff. But those who get genuinely angry or depressed about it probably shouldn't be investing at all. We just finished one of the great stock market summers in the past several decades, and are now giving away a reasonable portion of those amazing recent gains. Just look back at the yearly returns. The S&P 500 is up 26% in 1995. That's great. The NASDAQ, despite getting torched today, is up 31%. And the FOOL has risen 43% this year. I know it's Foolish to go back and look at LONGER term records, rather than just the past few days, but then you already knew I was a Fool.

KLA Instruments only dropped $1 1/4 today, thanks possibly to a feature that it enjoyed in Monday's Investor's Business Daily. At keyword IBD, you can search today's issue to read it. If you do, you'll see there predictions of 22% annual growth over the next 5 years. Consider that the most recently published 1996 estimates put earnings at $3.50 a share (these estimates are at the high end, though, please note) and you'll see why we feel quite well holding KLAC shares at $38 1/4 today. Further, you'll know why we believe that before the game ends, we'll have doubled our money in this stock, too.

For now, of course, it's frustrating sitting with a 14% loss. But that's just for now. We're not about now. We're about next year, next decade, next lifetime.

OK, not EXACTLY next lifetime. We do plan on continuing to amply enjoy this one, as we all together reap the too generous rewards of investing Foolishly.

---David Gardner, October 9, 1995

Today's Moves

AMER -3 3/8 AMAT -3 1/2 CHV + 3/4 GE - 1/8 GPS + 1/4 IOMG +1 1/4 KLAC -1 1/4 RIDE + 7/8 S - 3/4 SNIC ---

Today's Numbers

Day Month Year History FOOL -0.79% -5.95% 43.09% 58.88% S&P 500 -0.71% -1.03% 25.93% 26.17% NASDAQ -2.70% -5.64% 30.96% 36.74% Rec'd # Security In At Now Change 8/5/94 340 AmOnline 14.55 59.88 311.63% 5/23/95 510 Ride Inc. 9.91 19.75 99.36% 5/17/95 335 Iomega Corp 15.11 21.00 38.95% 8/5/94 165 Sears 28.93 35.00 21.00% 4/20/95 155 The Gap 32.55 38.13 17.13% 8/11/95 95 GenElec 57.91 62.75 8.35% 8/11/95 110 Chevron 49.00 49.75 1.53% 8/24/95 130 KLA Instrm 44.71 38.25 -14.45% 8/24/95 50 AppldMatl 115.05 90.25 -21.56% 12/23/94 340 SonicSol 14.48 10.00 -30.95% Rec'd # Security Cost Value Change 8/5/94 340 AmOnline 4945.56 20357.50 $15411.94 5/23/95 510 Ride Inc. 5052.44 10072.50 $5020.06 5/17/95 335 Iomega Corp 5063.13 7035.00 $1971.87 8/5/94 165 Sears 4772.65 5775.00 $1002.35 4/20/95 155 The Gap 5045.25 5909.38 $864.13 8/11/95 95 GenElec 5501.87 5961.25 $459.38 8/11/95 110 Chevron 5389.99 5472.50 $82.51 8/24/95130 KLA Instrm 5812.49 4972.50 -$839.99 8/24/95 50 AppldMatl 5752.49 4512.50 -$1239.99 12/23/94 340 SonicSol 4924.18 3400.00 -$1524.18 CASH $5969.86 TOTAL $79437.99 Transmitted: 95-10-09