Fool Portfolio Report
Friday, November 24, 1995
What a difference 48 hours makes! Wednesday's pre-celebration trading drug Fools through the mud, stamping out 2% of our portfolio and wrestling free nearly two thousand of our dollars.
Today, 24 hours after we gathered round and gave thanks for health, family, happiness and prosperity, Wall Street changed its mind and The Fool rose 2.20%, bringing back over $2,000 to our account. At market close today, our portfolio is still threatening a historical triple of the S&P 500, with Bells up 83.46% and Bogles up 30.88%.
America Online rose $3 5/8 to $70 1/2. No news. AMER investors over the past two years have seen this sort of consistent volatility. The stock, which touched $88 1/2 on November 2nd, had fallen as low as $66 3/4 this week before today's rally. AMER's move was responsible for more than 1% of our overall portfolio growth today.
Iomega, Iomega. . . wow. The stock sank from yesterday's close of $35 1/2 to $32 7/8 this morning before a wild IOMG rally into the end of the day found the stock bidding $37 3/8. That put the stock up $4 1/2 off its intra-day lows, up $1 3/4 on the day, and up 147.29% since we picked up 335 shares on May 17, 1995.
As more information comes trickling into the Iomega folder regarding The Equity Advisory "Sell" report, we all learn more and more about how Wall Street and the financial media operate. Consider for a moment that while the various news services regularly pick up items like Mr. Knie's report---which to many Foolish eyes housed some gross oversimplifications and excess bearishness---these same services do not cover the work of MF Chiros, who has nailed the Company and stock growth step-for-step over the past ten months.
Ahh, well, so we are once again reminded that "offline" we are not looking at a meritocracy, where performance records are everywhere and the cream rises to the top. Push your desk chair back and raise your hand, Fool, if you think only the very best are granted distribution on financial television and in financial print. Do I see any push-backed chairs. . . do I see any hands?
Thankfully, though, Fools online are totally committed to performance analyses, to broad accountability, to celebrating the very best, and to generating market-beating profits. The Equity Advisory can certainly be expected to find its words quoted back to them here online after Iomega's 4th and then 1st quarter reports have rolled in. Should be fun.
To close, I just wanted to relate a nice little Beating the Dow story from this past week. I spoke to a BTD investor whose full-service broker is apparently not at all pleased with the approach. He has told her that, yes, two of the five stocks have done very well for her (Sears and Merck), that two have fared decently (Chevron and 3M) and that one has just had a disgraceful year (Woolworth). His overarching assessment---less than a single year into a model that backtests an annual market-doubling performance over the past two decades---is that the Dow approach is a mediocre model, with only two out of five winners.
Fools of course take the time to actually piece together the bottom-line performance rather than just counting the number of "winners" in any portfolio. After all, we're trying to generate profits and build long-term savings here, right? A look at that five stock portfolio launched last February shows the following approximated growth numbers:
Sears, up 70%
Merck, up 55%
3M, up 23%
Chevron, up 10%
Woolworth, down 4%
BTD Return: 30.5%
S&P Return: 25%
The eyeballed returns look pretty good to me, and pretty good to her. She's just wondering exactly what full-service brokering compensated with trading commissions and sales prizes really does for the individual investor. We are too.
If the powers that be aren't going to put a much, much better model into place in 1996, a compensation model that actually BENEFITS individual clients rather than exploits them, then the retail side of this industry may not keep up with the Joneses. 'Cause all the Joneses really need at this point is a very basic and very Foolish education, which prizes minimal trading costs, long-term market-beating portfolio growth, a committment to the single most profitable investment vehicle of the century (the stock market), and collaboration.
Let's give thanks this weekend for a few things even Fools overlook at times: Education. Wit. Constancy. Accountability.
Tom Gardner, Novermber 24, 1995
AMER +3 5/8 AMAT + 1/2 CHV - 1/4 GE - 1/4 GPS --- IOMG +1 3/4 KLAC +1 1/2 RIDE --- S - 1/4
Day Month Year History FOOL +2.20% 2.44% 65.24% 83.46% S&P 500 +0.26% 3.18% 30.64% 30.88% NASDAQ +0.87% -0.57% 37.00% 43.04% Rec'd # Security In At Now Change 8/5/94 340 AmOnline 14.55 70.50 384.68% 5/23/95 510 Ride Inc. 9.91 25.25 154.88% 5/17/95 335 Iomega Corp 15.11 37.38 147.29% 4/20/95 155 The Gap 32.55 47.88 47.08% 8/5/94 165 Sears 28.93 39.50 36.56% 8/11/95 95 GenElec 57.91 66.00 13.96% 8/11/95 110 Chevron 49.00 49.25 0.51% 8/24/95 130 KLA Instrm 44.71 33.00 -26.19% 8/24/95 100 AppldMatl 57.52 42.13 -26.77% Rec'd # Security Cost Value Change 8/5/94 340 AmOnline 4945.56 23970.00 $19024.44 5/23/95 510 Ride Inc. 5052.44 12877.50 $7825.06 5/17/95 335 Iomega Corp 5063.13 12520.63 $7457.50 4/20/95 155 The Gap 5045.25 7420.63 $2375.38 8/11/95 95 GenElec 5501.87 6270.00 $768.13 8/11/95 110 Chevron 5389.99 5417.50 $27.51 8/24/95130 KLA Instrm 5812.49 4290.00 -$1522.49 8/24/95 100 AppldMatl 5752.49 4212.50 -$1539.99 8/5/94 165 Sears 4772.65 6517.50 $1744.85 CASH $8235.20 TOTAL $91731.45