Fool Portfolio Report
Monday, October 23, 1995
The Fool Portfolio began its last full October week of trading in grand style Monday, as it rocketed forward more than a percent and a half in opposition to its losing, competing indices. With both the NASDAQ and S&P 500 blowing tires in the stretch run, the FOOL zoomed by and lapped them, posting a gain of 1.59% on an otherwise losing day.
The strong move put our portfolio's historic total return over 40 percentage points above the S&P 500 in the 14 1/2 months since its debut.
Old-time readers have heard this before, but we do feel it important to point out to new readers that the S&P 500 is the same index that the vast majority of mutual funds UNDERPERFORM year in and year out. So this is not an inconsiderable achievement. . . and we are not modest or reluctant about pointing this out! Of course, our greatest enjoyment resides in the knowledge that some of our readers have followed Foolishness to similar returns. Before these days of glory, many of them were bound in the shackles of blase mutual fund investing. We find that tremendously satisfying.
A check of the tape reveals an exceptional move for Iomega, which rose $2 3/4 on the bid today, a gain exceeding 12%! We found no news to account for the amazing one-day return, which occurred on over 1.8 million shares traded. My normal technique of finding out the whys and hows of Iomega's trading is to consult our Iomega folder, but due to AOL system problems all day I have been unable to read our message boards. I hope America Online clears this up soon; it's very annoying.
Suffice to say for now---until we can all click into and read the Iomega folder---that some institutions are probably beginning to snap up shares as the IOMG story spreads. The close today was the highest since September, and well above its recent intra-day low of $16 1/2 (!) on October 5. Those brave souls who bought in at $17 when everyone else was panicking are up about 50% in less than three weeks. We do not, of course, advocate such "short-term trading" (and in fact, our experience tells us that most short-term traders were BAILING, not buying, at $17), but this does seem to be a good lesson about investing in general. Anyway, the stock is now within sight (once again) of its all-time high ($30).
Bolstering Iomega's ten-ton blast were impressive moves among our semiconductor stocks. Both KLA Instruments (up $1 1/4) and Applied Materials (up $1) buoyed the Fool Port on Monday. And Ride Incorporated, our snowboard manufacturer that sold off last week after reporting outstanding third-quarter earnings, gained back $7/8. RIDE's earnings per share came in at 33 cents vs. consensus estimates of only 27 cents. And in 3Q '94, the company reported just 16 cents. Ride now has a P/E of about 40, following numbers that demonstrate growth of more than 100%. We ain't surprised therefore, that the stock is back up. With a 120% investment gain in less than half a year, we're holding.
General Electric receives our Dog o' the Day award, as it succumbed to the market's whims and lost $1 1/8. The stock remains up 9.6% for us, which compares well to the 2.9% gain we've seen in the Dow Jones industrial average since our GE purchase. The company today announced that John D. Opie would succeed Frank Doyle as vice chairman and executive officer. Opie joins the three-man "star chamber" at GE (known there as the "executive committee), having been elevated from his position as president of GE Lighting. A rude greeting! Whether the market really felt that negatively about Mr. Opie is not a matter of Foolish speculation. We'll close by wishing the man best of Foolish success now through next August 11th!
--David Gardner, October 23, 1995
AMER - 3/8 AMAT +1 CHV - 3/8 GE -1 1/8 GPS + 1/4 IOMG +2 3/4 KLAC +1 1/4 RIDE + 7/8 S - 3/4 SNIC + 1/8
Day Month Year History FOOL +1.59% -0.76% 51.00% 67.65% S&P 500 -0.41% 0.11% 27.39% 27.63% NASDAQ -0.24% -0.63% 37.90% 43.98% Rec'd # Security In At Now Change 8/5/94 340 AmOnline 14.55 65.38 349.44% 5/23/95 510 Ride Inc. 9.91 21.75 119.55% 5/17/95 335 Iomega Corp 15.11 25.00 65.41% 8/5/94 165 Sears 28.93 35.13 21.43% 4/20/95 155 The Gap 32.55 37.63 15.59% 8/11/95 95 GenElec 57.91 63.50 9.64% 8/11/95 110 Chevron 49.00 47.63 -2.81% 8/24/95 130 KLA Instrm 44.71 41.50 -7.18% 8/24/95 100 AppldMatl 57.52 48.50 -15.69% 12/23/94 340 SonicSol 14.48 8.88 -38.72% Rec'd # Security Cost Value Change 8/5/94 340 AmOnline 4945.56 22227.50 $17281.94 5/23/95 510 Ride Inc. 5052.44 11092.50 $6040.06 5/17/95 335 Iomega Corp 5063.13 8375.00 $3311.87 8/5/94 165 Sears 4772.65 5795.63 $1022.98 4/20/95 155 The Gap 5045.25 5831.88 $786.63 8/11/95 95 GenElec 5501.87 6032.50 $530.63 8/11/95 110 Chevron 5389.99 5238.75 -$151.24 8/24/95130 KLA Instrm 5812.49 5395.00 -$417.49 8/24/95 100 AppldMatl 5752.49 4850.00 -$902.49 12/23/94 340 SonicSol 4924.18 3017.50 -$1906.68 CASH $5969.86 TOTAL $83826.11