Fool Portfolio Report
Thursday, November 16, 1995
Not a single bit of news today on Fool stocks and yet our porfolio rose 2.68%, or $2,473.12. It sure is nice to disregard some of the bad examples our federal government has set for years and years, and actually to ACCOUNT for every Foolish dollar.
Let's just make a few wishes upon stars tonight that one of the great achievements of the digital age is the establishment of strict financial accountability from guv'ment to investment firm to financial newsletter to neighborhood astrologer. As you know, holding your portfolio accountable daily doesn't take more than a few minutes each evening, keeps you on top of how your savings are doing versus the S&P 500, and helps you sleep at night knowing that---if you've been Foolish---your savings are up 89.38% since August 4th, 1994!
And how did our 2.68% gain stack up against the market, which oversimple business school analyses tell us we can't beat?! The S&P rose 0.57%, and the NASDAQ rose a piddling 0.25%, hurt by Goldman Sachs' downgrade of Microsoft and the stock's $4+ decline.
Can you believe that SIX of our ten stocks rose more than $1 per share today? We'll start with Ride Inc. (NASDAQ:RIDE), which climbed $1 1/2 to a bid of $25 3/8, touching an all-time high of $26 1/4 this afternoon. No news out of Washington. But word that the Morrow IPO date will be pushed up due to favorable market and industry conditions had to have helped our shredders today. This sort of activity---these sorts of new highs---are exactly what we expect from companies that show extraordinary sales growth, broadened profit margins, outperformed quarterly estimates, and all without a smidgen of long-term debt.
Next up, General Electric. The stock rose $1 5/8 on the bid to $67 1/2, an ALL-TIME high for General Electric, dating all the way back to the turn of the century. The stock has never been worth this much before, the company has never been worth this much before. . . and you won't find a single thoughtful financier who doesn't have complimentary things to say about the business acumen of our CEO, Jack Welch. Nice situation we're in here.
Remember how thorough we were in our research of GE? We broke out GE Capital's proposed buyout of Union Fidelity Life Insurance Co., we evaluated NBC from top to bottom---interviewing two hundred employees, we tested out their aerospace systems, we tracked their race to secure orders for 777 aircraft engines. . . we know this business better than anyone on the planet. Otherwise we wouldn't have purchased the stock.
Uhhh, yeah right! Be real. We listed the Dow stocks top to bottom by dividend yield. We looked at the five highest-yielding of the group. We ran some financial ratios. We fished General Electric out. The stock is now up 16.55% for us since early August versus S&P gains of around 7.5%. Beating the Dow should be the backbone of EVERY SINGLE individual investor's portfolio. 'Nuff said.
The Gap hippity-hopped back up $1 1/2 to $46 1/2, up 42.86% for us since April. Fools YPEGging this one know well-enough that 17-18x year-forward earnings of $3 in 1996 fairly prices this stock in the range of $51 to $54 a share. I paraphrase an earlier portion of today's report: strong sales, broadening profit margins, outperforming quarterly estimates, avoiding long-term debt obligations. Yep. . . that's The Gap.
How about that spooky stock, America Online, which rose $2 5/8 to $79 5/8, up 447% for investors who just like to buy and hold greatness ad infinitem. I'll say today what The Fool has said for sixteen months: Mr. Buffett has his Coca-Cola to the grave, we'll take our America Online. I expect we'll both be happy when the shovel hits the turf. AOL: A great brand, rocketing sales, a new market. There may be only one opportunity that America Online isn't enough capitalizing on at present: They house a financial services company that is forthright, aggressive, educational, engaging, and sporting annualized profits that beat up on the *entire world of finance*. Seems like promoting it heavily--- truly heavily---might strengthen their brand. But I may be biased.
And what about Applied Materials, up $2 today? I'll just reference our AMAT stock folder. . . the discussion there over the past week pretty consistently mimicks Fool HQ's position.
Holy Toledo, I almost forgot we actually have shares in Chevron (NYSE:CHV)! Chevron rose $1 1/4 to $49 3/8, launching it into profitability for bell-capped investors. True, CHV is underperforming the Dow since we purchased it, but Sears and GE are enough making up for its lackluster performance. Hey, maybe this is the start of new things for CHV in the Fool Port. Anyone want to begin wildly researching Chevron's international drilling plans?! Any takers? Any. . . ?!! No?
Closing out a day on which we quadrupled the market averages, I hope you'll pardon what might look like nothing more than an advertisement mixed in with genuine hubris. Or genuine hubris mixed in with nothing more than an ad. It might look like it. . . let me assure you that it's just precisely what it seems to appear. Please forgive the outburst. Pardon me.
THE FOOL PORTFOLIO IS UP 89% VERSUS MARKET GROWTH OF 30%, WITH THE HIGHEST ACCOUNTING STANDARD IN THE NATION.
HAVE YOU TOLD EVERYONE YOU KNOW ONLINE, OFFLINE, EVERY EXPERIENCED OR GREENHORN INVESTOR, NEIGHBORHOOD PAL, MARKET-TIMING GOOROO, CHART-READING ASTROLOGER, STRICTLY FUNDAMENTAL INVESTOR, PENSION FUND MANAGER, LOCAL BUSINESS OWNER. . . HAVE YOU TOLD EVERY FOOL YOU KNOW ABOUT THIS SERVICE?
HAVE YOU? (Uhh, sorry for that shouting. . . lost touch with the caps-lock button.)
Why not? :(
We aim to serve only. And we wanna stay in business into the New Year. ;)
Tom Gardner, November 16, 1995
AMER +2 5/8 AMAT +2 CHV +1 1/4 GE +1 5/8 GPS +1 1/2 IOMG + 1/4 KLAC - 1/4 RIDE +1 1/2 S + 1/2 SNIC - 1/8
Day Month Year History FOOL +2.68% 5.75% 70.57% 89.38% S&P 500 +0.57% 2.72% 30.06% 30.31% NASDAQ +0.25% 0.81% 38.90% 45.03% Rec'd # Security In At Now Change 8/5/94 340 AmOnline 14.55 79.63 447.41% 5/23/95 510 Ride Inc. 9.91 25.38 156.14% 5/17/95 335 Iomega Corp 15.11 32.88 117.52% 4/20/95 155 The Gap 32.55 46.50 42.86% 8/5/94 165 Sears 28.93 39.38 36.13% 8/11/95 95 GenElec 57.91 67.50 16.55% 8/11/95 110 Chevron 49.00 49.38 0.77% 8/24/95 130 KLA Instrm 44.71 38.50 -13.89% 8/24/95 100 AppldMatl 57.52 47.63 -17.21% 12/23/94 340 SonicSol 14.48 7.00 -51.67% Rec'd # Security Cost Value Change 8/5/94 340 AmOnline 4945.56 27072.50 $22126.94 5/23/95 510 Ride Inc. 5052.44 12941.25 $7888.81 5/17/95 335 Iomega Corp 5063.13 11013.13 $5950.00 4/20/95 155 The Gap 5045.25 7207.50 $2162.25 8/5/94 165 Sears 4772.65 6496.88 $1724.23 8/11/95 95 GenElec 5501.87 6412.50 $910.63 8/11/95 110 Chevron 5389.99 5431.25 $41.26 8/24/95130 KLA Instrm 5812.49 5005.00 -$807.49 8/24/95 100 AppldMatl 5752.49 4762.50 -$989.99 12/23/94 340 SonicSol 4924.18 2380.00 -$2544.18 CASH $5969.86 TOTAL $94692.36