Fool Portfolio Report
Tuesday, November 14, 1995

When The Motley Fool Investment Portfolio loses to the Standard & Poor's 500 by more than full percentage point, we're in the habit of putting up the daily writeup as LATE as we possibly can.

Just kidding. Apologies for tonight's delay.

Now, by God, what happened to The Fool Portfolio today? The S&P 500 fell 1/2%, the NASDAQ withered 1.65%, and The Fool fell fully 1.85%. Take a look at some of the declines in our stocks. America Online, after running as high as $82 1/2, closed the day down $2 to $78 1/2. All that talk of scary valuations in Barrons and on Rukeyser seem to have touched up our biggest winner today. Again, basic subscriber value off 6 million subs at $730 per sub caps AMER at $4.4 billion. And that's only a per-sub count. There's more to the business as it extends out onto the Internet. The stock is now capped at $3.8 billion with the runnup in shares outstanding.

Goodnight, semiconductor stocks. True, it doesn't harm us much, as The Fool Port is diversified from multi-billion-dollar to little weenie company, from retail to online to semis to financial services and airplane engine construction. . . but hey, with our money in two semiconductor stocks, Applied Materials and KLA Instruments, it's about time we lash out at the technology analysts that appear to be playing games with the market.

Either you believe the institutions who are wildly, actively trading these issues or you believe the companies, which are telling the Street that demand is overwhelming. We'll look past the traders to the companies which continue to show financial strength. KLA's earnings report was phenomenal, Applied Materials' is on the way. The fundamentals tell the story, not the qualitative Street recommendations.

How about The Gap today, continuing to nicely play the hedge game for us. The money flows out of technology temporarily into our retailers? GPS shares rose $3/4 back to a bid of $46 3/8. With the 20% outperformance, The Gap is looking like a low-to-mid $50s stock to us, meaning we could well have another 15-20% in this stock. Getting to selling strategies, here we have an awesome company on our hands, financially resilient with the strongest brand in the industry. 17-18x year-forward earnings of $3.00-$3.15 EPS don't seem like unreasonable targets heading into and through Christmas.

And again we close with Iomega.

There's always resistance before a new standard is set, as the larger players try to get in on the manufacturing profits but we continue to believe that IOMG has the management, the marketing plan, the established brand, and the consumer enthusiasm to show stunning profits in the succeeding two quarters and beyond. Today's $3/8 drop when the NASDAQ stumbled is quite nice. As Lynch wrote (paraphrased): When the market gets hit, look for the growth stocks that went higher or held their own. . . therein sit some market winners in the year ahead.

We think Iomega, the Zip and Jaz are just such market beaters.

Tom Gardner, November 14, 1995


Today's Moves


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


Today's Numbers


Day Month Year History FOOL -1.85% 3.83% 67.47% 85.95% S&P 500 -0.51% 1.34% 28.31% 28.55% NASDAQ -1.65% 0.44% 38.39% 44.49% Rec'd # Security In At Now Change 8/5/94 340 AmOnline 14.55 78.50 439.68% 5/23/95 510 Ride Inc. 9.91 23.75 139.74% 5/17/95 335 Iomega Corp 15.11 32.75 116.69% 4/20/95 155 The Gap 32.55 46.38 42.47% 8/5/94 165 Sears 28.93 38.63 33.53% 8/11/95 95 GenElec 57.91 65.38 12.88% 8/11/95 110 Chevron 49.00 48.50 -1.02% 8/24/95 130 KLA Instrm 44.71 39.00 -12.77% 8/24/95 100 AppldMatl 57.52 45.88 -20.25% 12/23/94 340 SonicSol 14.48 7.25 -49.94% Rec'd # Security Cost Value Change 8/5/94 340 AmOnline 4945.56 26690.00 $21744.44 5/23/95 510 Ride Inc. 5052.44 12112.50 $7060.06 5/17/95 335 Iomega Corp 5063.13 10971.25 $5908.12 4/20/95 155 The Gap 5045.25 7188.13 $2142.88 8/5/94 165 Sears 4772.65 6373.13 $1600.48 8/11/95 95 GenElec 5501.87 6210.63 $708.76 8/11/95 110 Chevron 5389.99 5335.00 -$54.99 8/24/95130 KLA Instrm 5812.49 5070.00 -$742.49 8/24/95 100 AppldMatl 5752.49 4587.50 -$1164.99 12/23/94 340 SonicSol 4924.18 2465.00 -$2459.18 CASH $5969.86 TOTAL $92972.99