Fool Portfolio Report
Monday, October 9, 1995
Hey, you remember those old American Tourister commercials when a handful of caged gorillas kicked, flung, and stomped their luggage? And those old "Takes a licking" Timex ads?
So too with some of our Foolish holdings these last few weeks, as traders caged and chained to PCs, strung with telephones, and implanted with quote machines have tossed and booted our investments up and down the Street.
Takes a beating, and keeps on beating?
Today that was Iomega Corporation (NASDAQ:IOMG), who posted third quarter earnings of 10 cents and the stock rallied closing up $1 1/2 to $22 1/2. Iomega is now up 48.87% since we bought the stock in May, 1995 and we're eyeballing annual highs now.
We actually haven't had a chance to listen to the tape of the conference call, nor have we really hunkered down and reviewed the quarterly numbers yet. Surprising? Not really. To reiterate, we'd committed ourselves to looking past these third quarter numbers long before Iomega announced their *2nd quarter* results. Our focus on the 4th and subsequent 1st quarter numbers falls in line with Kim Edwards'. We don't think people who buy and sell this stock before the release of the 1Q 1996 numbers are actually *investing* in this company. We are.
Now this doesn't mean that we're not going to review the numbers; we certainly will. But the analysis will come out in stages over the next week and the one thing I'll guarantee is that our Foolish take on things won't be designed towards definitiveness. Why? We want to re-emphasize what most of you don't need to be re-told. We're picking the best companies we can find, with conservative and aggressive management teams, with tremendous growth potential, and all from a long-term perspective. In the case of Iomega, the story is going to be told in 1996.
In this spirit, let me be the first to say that something disappointing did come to pass today in Fooldom, and that was a wild fax and phone-in campaign in criticism of some inaccuracies by a CNBC anchor regarding Iomega's earnings report. CNBC reporter Joe Kiernan today labeled IOMG's quarterly report a disappointment, in light of earnings in the comparable quarter last year.
He made a mistake. We concur with a Fool or two in the Iomega folder who reminded everyone that when you have to cover hundreds, nay thousands, of stocks, some information slips through the cracks (read: market inefficiency, human frailty, et al). Honest mistakes. And there's nothing wrong with sending a fax over to CNBC asking them to offer up a correction. A simple mistake, a simple call for a correction. All Foolish thus far.
But then things turn a bit. Some of the faxes were downright nasty.
The aim of this forum is to help you to secure market-drubbing portfolio growth, process basic business principles, find reasons to save for your family's future, and have a helluva good time in the interim. It is not, nor has it ever been our aim to help you maximize your investment returns AT ANY AND ALL COSTS. It never will be.
We think maximal returns, low bottom-line accountability, a disagreeable digestive process, trouble sleeping, dishonest business dealings, and aggressive behavior ought be left for the institutional world---there are plenty of other financial forums, on- and offline, designed to serve that market. In Fooldom, let's set a different example for individual investors by being diligent, decent to a fault, aggressive *in our research*, instructive, entertaining, highly profitable, and focused on the long-term benefits of investing.
I don't know Joe Kiernan, but my impression of him on television is that he's committed to his work; he's oft contrarian (a good thing when the Dorf sits so near); he understands business fundamentals; he presents thorough research, and he's a decent person. I just hate to think that aggressively critical faxes were sent to Mr. Kiernan because of his error this morning. Correct inaccuracies, yes. . . but the manner in which you do so is at least as important---in a financial world overloaded with inaccuracy---as the actual correction.
I would hope that anyone who sent Mr. Kiernan a vitriolic fax or phone message today would follow-up with a short apology tomorrow. It ain't worth the harshness; a few missteps does not alter the entire short- to intermediate-term valuation of a company. Even if they did, it ain't worth it over the long haul. Let's keep the same spirit as alway: productive, scholarly, bold, and Foolish.
To close tonight, I want to alert everyone to an oncoming service-wide auditorium event we'll be running here on America Online on October 17. It will focus on Iomega's earnings report, the future of the Company, and the valuation of their stock. From Chiros to Ben to DrJimbo, we'll bring loads of other Fools up onstage to share their insights into IOMG. . .
Oh yeah, we lost 0.85%, finishing third today. America Online's $1 1/2 drop alongside KLA Instruments' $1 3/4 decline hurt. A wild and wooly day---we're not terribly anxious about all this tech talk and rotation. It rotates back to technology. . . we're heading into the 21st century not back into the 20th.
- Tom Gardner, 10/10/95
AMER -1 1/2 AMAT +1 1/4 CHV - 1/8 GE - 1/4 GPS - 1/8 IOMG +1 1/2 KLAC -1 3/4 RIDE - 5/8 S - 1/2 SNIC - 1/8
Day Month Year History FOOL -0.85% -6.75% 41.88% 57.53% S&P 500 -0.15% -1.18% 25.75% 25.99% NASDAQ -0.13% -5.76% 30.79% 36.56% Rec'd # Security In At Now Change 8/5/94 340 AmOnline 14.55 58.38 301.32% 5/23/95 510 Ride Inc. 9.91 19.13 93.05% 5/17/95 335 Iomega Corp 15.11 22.50 48.87% 8/5/94 165 Sears 28.93 34.50 19.27% 4/20/95 155 The Gap 32.55 38.00 16.74% 8/11/95 95 GenElec 57.91 62.50 7.92% 8/11/95 110 Chevron 49.00 49.63 1.28% 8/24/95 130 KLA Instrm 44.71 36.50 -18.37% 8/24/95 50 AppldMatl 115.05 91.50 -20.47% 12/23/94 340 SonicSol 14.48 9.88 -31.82% Rec'd # Security Cost Value Change 8/5/94 340 AmOnline 4945.56 19847.50 $14901.94 5/23/95 510 Ride Inc. 5052.44 9753.75 $4701.31 5/17/95 335 Iomega Corp 5063.13 7537.50 $2474.37 8/5/94 165 Sears 4772.65 5692.50 $919.85 4/20/95 155 The Gap 5045.25 5890.00 $844.75 8/11/95 95 GenElec 5501.87 5937.50 $435.63 8/11/95 110 Chevron 5389.99 5458.75 $68.76 8/24/95130 KLA Instrm 5812.49 4745.00 -$1067.49 8/24/95 50 AppldMatl 5752.49 4575.00 -$1177.49 12/23/94 340 SonicSol 4924.18 3357.50 -$1566.68 CASH $5969.86 TOTAL $78764.86 Transmitted: 95-10-10