Fool Portfolio Report
Thursday, November 30, 1995
Bad day today for The Fool, as we fell 0.77% versus S&P declines of 0.38%. But thankfully, we did close out the month of November ahead of the nation's two lesser indices. Here are the month's numbers:
S&P 500: +4.10%
These numbers, as well as our historical returns of 91% growth versus 32% growth for the S&P 500, are net all commissions and spreads. It occasionally bears repeating that we do not know of a single equities portfolio on the planet that reports all of the costs an individual investor has to pay---while also making picks ALONGSIDE readers rather than ahead of them.
Let's take our sale of Ride Inc. (NASDAQ:RIDE) today as an example. In the middle of May, 1995, we purchased 510 shares of Ride at a cost of $9.91 per share. Kind of a bizarre price to quote but that's the only way to represent the price AFTER deducting the $80 commission cost on the trade. (We were with Charles Schwab last spring; we are now at Aufhauser at half the cost).
Importantly, when we purchased our RIDE shares, we announced this publicly to readers before making the trade in our account. This way, we essentially competed with everyone for the best price----rather than the traditional practice of beating them to earlier and typically better prices. When financial television's tipster gets on the air and wheezes out a big-city analyst's pick, you can be sure that the recommendation has already been acted on by the firm. It's a neat, short-term pyramid game. . . and it's not one that Fools play or to which they pay much attention.
So, we were into RIDE at a cost of $9.91 per share. And the stock---and more importantly, the company---banged its way ahead to some remarkable quarterly numbers as well as to rapid value appreciation. The value of this company has increased *dramatically* since we owned it, with more shares out and a stock price that sits 113% higher than when we purchased it.
Last night, we announced we'd be selling our RIDE shares, and this morning we cashed out at a market price of $21 1/8, and our position was worth $10,746.26 after commissions were deducted. That added up to a 112.7% gain for us since we bought RIDE just about six months ago.
Before proceeding, I want to interject a brief clarification here. At times, as you scan through our daily reports, it must seem like we're unbearably egotistical. At times, we are! But the above explanation is not put there to pump ourselves up, but rather to explain how an industry that is in need of reform operates.
When public picks are front-run, when bottom-line accountability is fudged, when hype is celebrated by media that should be serving their customers, when things inconsequential are prized, it is either time to sit back and watch the structure of things wobble OR it's time to edit and reconstruct. The Fool hopes that, by the end of 1996, every single financial newsletter, fax service, magazine stock pick, etc. will be held accountable for individual investors to spy performance records. When the bar is raised, oddly enough, the direct consequence in a given field is that the market EXPANDS not contracts, as consumer confidence blossoms. And consumer confidence in our country should always be blossoming.
Now, to the rest of the day.
The Gap announced that same-store sales for the four-week period ended Novermber 25th had risen 1%, and that total sales had climbed 19%, from $332 million to $396 million. And the market didn't like it one bit. Our GPS shares closed down $3 3/8 to a bid of $45 today. Yyyowch! We continue to fairly price the stock in the here-and-now above $50 a share.
KLA Instruments fell $2 today. And America Online offset that loss, cruising up another $1 1/8 to a bid of $40 7/8. AMER is just a hare's breath away from its split-adjusted all-time highs of $44 1/4. Every now and then it's worth remembering what our original cost in AMER was, and what the stock would be at now sans splits. We bought the stock around $58 a share sixteen months ago, and without the splits, it would be priced at $327. Look at those numbers, pinch yourself, Fool, muse on all that bearish talk in the AMER folder, and repeat after me: Who woulda thunk it!?
Otherwise, leave aside the RIDE sell, the Gap collapse, the AMER climb towards all-time highs, leave it all out, and you have a pretty humdrum day. A day on which we lost by nearly 1/2 percent to the S&P. Darn. We prefer to double it.
Tom Gardner, November 30, 1995
AMER +1 1/8 AMAT + 1/2 CHV - 1/8 GE - 3/8 GPS -3 3/8 IOMG --- KLAC -2 S - 3/4
Day Month Year History FOOL -0.77% 6.80% 72.26% 91.26% S&P 500 -0.38% 4.10% 31.81% 32.06% NASDAQ +0.16% 2.24% 40.86% 47.08% Rec'd # Security In At Now Change 8/5/94 680 AmOnline 7.27 40.88 462.02% 5/17/95 335 Iomega Corp 15.11 42.50 181.20% 4/20/95 155 The Gap 32.55 45.00 38.25% 8/5/94 165 Sears 28.93 39.38 36.13% 8/11/95 95 GenElec 57.91 67.13 15.90% 8/11/95 110 Chevron 49.00 49.38 0.77% 8/24/95 100 AppldMatl 57.52 48.50 -15.69% 8/24/95 130 KLA Instrm 44.71 34.50 -22.84% Rec'd # Security Cost Value Change 8/5/94 680 AmOnline 4945.56 27795.00 $22849.44 5/17/95 335 Iomega Corp 5063.13 14237.50 $9174.37 4/20/95 155 The Gap 5045.25 6975.00 $1929.75 8/11/95 95 GenElec 5501.87 6376.88 $875.01 8/11/95 110 Chevron 5389.99 5431.25 $41.26 8/24/95 100 AppldMatl 5752.49 4850.00 -$902.49 8/24/95130 KLA Instrm 5812.49 4485.00 -$1327.49 8/5/94 165 Sears 4772.65 6496.88 $1724.23 CASH $18981.46 TOTAL $95628.96